Exercise 5-5
Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.
BRUNO COMPANY
BALANCE SHEET
DECEMBER 31, 2012
Current assets
Cash $263,380
Accounts receivable (net) 343,380
Inventories (lower-of-average-cost-or-market) 404,380
Equity investments (trading) at cost (fair value $121,260) 141,260
Property, plant, and equipment
Buildings (net) 571,260
Equipment (net) 161,260
Land held for future use 176,260
Intangible assets
Goodwill 83,380
Cash surrender value of life insurance 93,380
Prepaid expenses 15,380
Current liabilities
Accounts payable 136,260
Notes payable (due next year) 128,380
Pension obligation 83,260
Rent payable 52,380
Premium on bonds payable 56,380
Long-term liabilities
Bonds payable 501,260
Stockholders equity
Common stock, $1.00 par, authorized 400,000 shares, issued 293,380 293,380
Additional paid-in capital 183,380
Retained earnings ?
Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $163,380 and for the office equipment, $108,380. The allowance for doubtful accounts has a balance of $20,380. The pension obligation is considered a long-term liability. (List current assets in order of liquidity. List property plant and equipment in order of buildings and equipment.)
Exercise 5-12
Presented below is the trial balance of Vivaldi Corporation at December 31, 2012.
Debit
Credit
Cash
$200,380
Sales
$7,902,370
Debt Investments (trading) (cost, $145,000)
155,370
Cost of Goods Sold
4,802,370
Debt Investments (long-term)
302,380
Equity Investments (long-term)
280,380
Notes Payable (short-term)
92,370
Accounts Payable
457,370
Selling Expenses
2,002,370
Investment Revenue
64,880
Land
260,000
Buildings
1,043,380
Dividends Payable
139,380
Accrued Liabilities
98,370
Accounts Receivable
437,370
Accumulated Depreciation Buildings
352,000
Allowance for Doubtful Accounts
27,370
Administrative Expenses
901,880
Interest Expense
212,880
Inventory
600,380
Extraordinary Gain
81,880
Notes Payable (long-term)
903,380
Equipment
602,370
Bonds Payable
1,003,380
Accumulated Depreciation Equipment
60,000
Franchises
160,000
Common Stock ($5 par)
1,002,370
Treasury Stock
193,370
Patents
195,000
Retained Earnings
81,380
Paid-in Capital in Excess of Par
83,380
$12,349,880
$12,349,880
Calculate ending retained earnings and prepare a balance sheet at December 31, 2012, for Vivaldi Corporation. Ignore income taxes. (List current assets in order of liquidity. List property plant and equipment in order of land, building and equipment.)
Exercise 5-15
Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31.
2012
2011
Cash $307,092 $152,568
Accounts receivable 352,080 361,860
Investments 101,712 144,744
Equipment 582,888 469,440
Less: Accumulated depreciation equipment (207,336 ) (174,084 )
Current liabilities 262,104 295,356
Capital stock 312,960 312,960
Retained earnings 561,372 346,212
Additional information:
Investments were sold at a loss (not extraordinary) of $13,692; no equipment was sold; cash dividends paid were $97,800; and net income was $312,960.
(a) Prepare a statement of cash flows for 2012 for Sondergaard Corporation. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Exercise 24-4
As loan analyst for Madison Bank, you have been presented the following information.
Plunkett Co.
Herring Co.
Assets
Cash $126,600 $323,600
Receivables 226,500 303,100
Inventories 561,500 518,600
Total current assets 914,600 1,145,300
Other assets 494,000 616,400
Total assets $1,408,600 $1,761,700
Liabilities and Stockholders Equity
Current liabilities $308,200 $350,700
Long-term liabilities 400,500 494,000
Capital stock and retained earnings 699,900 917,000
Total liabilities and stockholders equity $1,408,600 $1,761,700
Annual sales $948,900 $1,514,800
Rate of gross profit on sales 30 % 35 %
Each of these companies has requested a loan of $50,680 for 6 months with no collateral offered. In as much as your bank has reached its quota for loans of this type, only one of these requests is to be granted.
Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.)