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Ratio and Cashflows

Apex Limited
Income Statement
For the Year Ended December 31

2006 2005

Net Sales $2,535,000 $2,412,000
Cost of goods sold 1,329,500 1,297,500
Gross profit 1,205,500 1,114,500
Selling/admin expenses 756,000 719,500
Income from operations 449,500 395,000
Other expenses/losses 0 0
Interest expense 25,000 19,000
Income before income taxes 424,500 376,000
Income tax expense 106,125 94,000
Net Income $318,375 $282,000

Apex Limited
Balance Sheets
December 31,

2006 2005

Assets
Current Assets
Cash $107,500 $93,200
Shrt term invest. 79, 500 68,400
A/ R (net) 112,500 110,320
Inventory 156,060 142,500
Total current assets 455,560 414,420
Plant assets ( net) 765,440 732,440
Total assets $1,221,00 $1,146,660

Liabilities/Stockholder Equity
2006 2005
Current Liabilities
Account Payable $170,500 $157,300
Income tax payable 65,000 63,200
Total current liabilities 235,500 220,500
Bonds Payable 250,000 250,000
Total Liabilities 485,500 470,500
Stockholders equity
Common Stock ($5 par) 360,500 390,500
Retained earnings 375,000 285,860
Total stockholders equity 735,500 676,360
Total liabilities stockholder equity $1,221,000 $1,146,860

All sales were on account. The allowance for doubtful accounts were $6,400 on December 31, 2006 and $5,400 on December 31, 2005

Compute the following ratios for 2006 (weighted average common shares in 2006 were 60,00)

(a) Earning per share (EPS)
(b) Return on common stockholders equity
(c) Return on assets
(d) Current ratio
(e) Acid-test (quick) ratio
(f) Receivable turnover
(g) Inventory turnover
(h) Times interest earned
(i) Asset turnover
(j) Debt to total assets ratio

Arrange the following information to complete the statement of cash flows for Range Associates Inc. Use direct method
Place parenthesis around those dollar amounts representing cash outlays.

Purchase of marketable sercurites $60,000
Proceeds from sales of marketable securities 120,000
Interest and dividend received 12,000
Interest paid 11,000
Taxes paid 55,000
Dividends paid 25,000
Proceeds from short-tem borrowing 30,000
Payments to settle short term debts 37,000
Cash received from customers 810,000
Cash paid to suppliers/employees 560,000
Proceeds form issuing capital stock 150,000
Purchases of plant assets 360,00
Proceeds from sales of plant assets 42,000
Cash and cash equivalent beginning of year 40,000

Range Associates Inc
Statement of cash flows

Cash Flows from operating activites

Cash provided by operating activities

Cash disbursed for operating activities

Net cash flow from operating activities

Cash flows from investing activities

Net cash used by investing activities

Cash flow from financing activities

Net cash provided by financing

Net increase (decrease) in cash

Cash and cash equivalents beginning of year

Cash and cash equivalents end of the year

Andro Corporation
Income Statement
For the year ended December 31

2006
Net Sales $220,000
Cost of goods sold 180,000
Gross Profit 40,000
Selling expense $14,000 0
Administrative expense 8,000 22,000
Income from operations 18,000
Other expenses and losses 0
Interest expense 1,000
Income before income taxes 17,000
Income tax expense 4,000
Net Income $13,000

Andro Corporation
Balance Sheet
December 31 increase
(Decrease)
Assets 2006 2005

Cash $31,000 $13,000 18,000
Accts Recievable 28,000 14,000 14,000
Merch.Inventory 25,000 35,000 (10,000)
Property plant/equipt. $60,000 $78,000 0 0
Less:Accum Deprep (22,000) 38,000 (24,000) 54,000 (16,000)
Total $122.000 $116,000

Liabilities/Stockholder Equit

Accounts Payable $27,000 $23,000 4,000
Income tax payable 5,000 8,000 (3,000)
Bonds Payable 27,000 35,000 (8,000)
Common Stock($5 par) 18,000 14,000 4,000
Retained earnings 45,000 36,000 9,000
Total $122,000 $116,000

Additional information:

(1) Dividends of $4,00 were declared and paid
(2) During the year equipment was sold fo $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale
(3) All depreciation expenses - $10,000 is in the selling expense category
(4) All sales and purchases are on account.

Additional information:
All payable pertain to Merchandise creditors
All operation expenses except for depreciation are paid in cash
Prepare a statement of cash flows using the direct method

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Solution Summary

The solution discusses ratio and cashflows.

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