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Computing Amounts Assuming a Periodic Inventory

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2-9. Yoakum Company reported the following information related to inventory and sales:
Units Unit Cost
Beginning inventory 1,000 $20
Purchase No. 1 7,000 22
Purchase No. 2 2,000 23

Sales ? 7,000 units at $38 per unit.

Compute the following amounts assuming a periodic inventory:
FIFO: Revenue; Cost of Goods Sold; Gross Margin; and Balance Sheet Inventory
LIFO: Revenue; Cost of Goods Sold; Gross Margin: and Balance Sheet Inventory

14. On January 1, 20D, Janus Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid semiannually. The following present value factors have been provided to answer the subsequent questions:
Time Period Interest PV of $ PV of an Annuity
10 10% .386 6.145
10 8% .463 6.710
10 12% .322 5.650
20 5% .377 12.462
20 4% .456 13.590
20 6% .312 11.470

Calculate the issuance price if the market rate of interest is 12%.

16. A company reported current assets of $80,000, noncurrent assets of $350,000, current liabilities of $32,000 and long-term liabilities of $120,000. What would be the current ratio?
17. Current assets are $70,000, noncurrent asset are $150,000, current liabilities are $40,000 and long-term liabilities are $30,000. What is the debt to equity ratio?

18. If earnings per share is $2.50 and the number of shares of capital stock outstanding is 6,000, then net income equals?

19. Discount Toys is a retail toy store. The following are selected figures from their income statement (in millions). Use this table for to compute the ratios for 2006, 2005, 2004
2006 2005 2004
Sales revenues $11,332 $11,862 $11,170
Net income $404 $279 ($132)
Average total assets $8,178 $8,126 $7,931
Average stockholders' equity $3,549 $3,652 $4,026
Compute the following ratios for 2006, 2005 and 2004. Explain what has happened to the return on equity for Discount Toys and discuss the causes of changes in the ratio for the three years.
2006 2005 2004
(1) Net profit margin
(2) Asset turnover
(3) Financial leverage
(4) Return on equity

32. Assume total liabilities are $40,000, total stockholders' equity $75,000, and all assets, other than current assets, total $50,000. What would be the amount of current assets?

38. Hubbard Company purchased a truck on January 1, 2006, at a cost of $34,000. The company estimated that the truck would have a useful life of 4 years and a residual value of $4,000.
Complete the following table:
Year Depreciation
Straight-line method Depreciation
Declining balance method
200% acceleration rate
2006
2007
2008
2009
Which of the two methods in the previous question would result in:
Lower net income in 2007?
Lower net income in 2008?

48. Please note five (or more if you wish) key things about this statement that suggests strengths, weaknesses, or other significant relationships that can be identified reading only the cash flow statement.
See attached Delta_Airlines PDF.

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Homework Problems Week 5 (STUMPED)
2-9.Yoakum Company reported the following information related to inventory and sales:
Units Unit Cost
Beginning inventory 1,000 $20
Purchase No. 1 7,000 22
Purchase No. 2 2,000 23

Sales — 7,000 units at $38 per unit.

Compute the following amounts assuming a periodic inventory:
FIFO: Revenue; Cost of Goods Sold; Gross Margin; and Balance Sheet Inventory
In FIFO method the earliest purchases are assumed to be sold first.
Revenue = 7,000 units X $38 = $266,000
Cost of goods sold would be the earliest purchases. Total units sold are 7,000 which would be 1,000 from beginning inventory and 6,000 from Purchase No. 1
Cost of goods sold = 1,000 X 20 + 6,000 X 22 = 152,000
Gross margin = Revenue - Cost of goods sold = 266,000-152,000 = 114,000
Ending inventory is the remaining units = 1,000 from Purchase No. 1 and 2,000 from Purchase No. 2
Ending inventory = 1,000 X 22 + 2,000 X 23 = $68,000
LIFO: Revenue; Cost of Goods Sold; Gross Margin: and Balance Sheet Inventory
In LIFO the latest purchases are assumed to be sold first.
Revenue remains the same = $266,000
The cost of goods sold would be 2,000 from Purchase No.2 + 5,000 from Purchase No. 1
Cost of goods sold = 2,000 X 23 + 5,000 X 22 = 156,000
Gross Margin = 266,000-156,000=$110,000
Ending inventory is now the remaining which is 2,000 of Purchase No. 1 + 1,000 of beginning
Ending inventory = 2,000 X 22 + 1,000 X 20 = 64,000
14.On January 1, 20D, Janus Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid semiannually. The following present value ...

Solution Summary

The solution computes amounts assuming a periodic inventory.

$2.19