Managerial Accounting 1B

Financial and Managerial Accounting

Chapter 13

1.

 

Exercise 13-3 Computation and analysis of trend percents L.O. P1

	2013	2012	2011	2010	2009
Sales	$ 283,880	$ 271,800	$ 253,680	$ 235,560	$ 151,000
Cost of goods sold	129,200	123,080	116,280	107,440	68,000
Accounts receivable	19,100	18,300	17,400	16,200	10,000

 

Compute trend percents for the above accounts, using 2009 as the base year. (Omit the “%” sign in your response.)

 

2.

 

Exercise 13-7 Common-size percents L.O. P2

Sanderson Company’s year-end balance sheets follow.

 

	At December 31			2012			2011			2010
	Assets
	Cash		$	30,800		$	35,625		$	36,800
	Accounts receivable, net			88,500			62,500			49,200
	Merchandise inventory			111,500			82,500			53,000
	Prepaid expenses			9,700			9,375			4,000
	Plant assets, net			277,500			255,000			229,500
	Total assets		$	518,000		$	445,000		$	372,500
	Liabilities and Equity
	Accounts payable		$	128,900		$	75,250		$	49,250
	Long-term notes payable secured by mortgages on plant assets			97,500			102,500			82,500
	Common stock, $10 par value			162,500			162,500			162,500
	Retained earnings			129,100			104,750			78,250
	Total liabilities and equity		$	518,000		$	445,000		$	372,500

 

Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final answers to 1 decimal place. Omit the “%” sign in your response.)

 

 

Exercise 13-9 Liquidity analysis and interpretation L.O. P3

[The following information applies to the questions displayed below.]

Sanderson Company’s year-end balance sheets follow.

 

	At December 31			2012			2011			2010
	Assets
	Cash		$	30,800		$	35,625		$	36,800
	Accounts receivable, net			88,500			62,500			49,200
	Merchandise inventory			111,500			82,500			53,000
	Prepaid expenses			9,700			9,375			4,000
	Plant assets, net			277,500			255,000			229,500
	Total assets		$	518,000		$	445,000		$	372,500
	Liabilities and Equity
	Accounts payable		$	128,900		$	75,250		$	49,250
	Long-term notes payable secured by mortgages on plant assets			97,500			102,500			82,500
	Common stock, $10 par value			162,500			162,500			162,500
	Retained earnings			129,100			104,750			78,250
	Total liabilities and equity		$	518,000		$	445,000		$	372,500

 

The company’s income statements for the years ended December 31, 2012 and 2011, follow. Assume that all sales are on credit:

 

For Year Ended December 31	2012						2011
Sales				$	672,500					$	530,000
Cost of goods sold	$	410,225					$	344,500
Other operating expenses		208,550						133,980
Interest expense		11,100						12,300
Income taxes		8,525						7,845
Total costs and expenses					638,400						498,625
Net income				$	34,100					$	31,375
Earnings per share				$	2.10					$	1.93

 

Section Break

Exercise 13-9 Liquidity analysis and interpretation L.O. P3

 

3.

 

 

Exercise 13-9 Part 1

(1)	Compute days’ sales uncollected. (Use 365 days a year. Do not round intermediate calculations and roundyour final answers to the nearest whole number.)

 

4.

 

 

Exercise 13-9 Part 2

(2)	Compute accounts receivable turnover. (Round your answers to 1 decimal place.)

 

2012
2011

 

5.

 

 

Exercise 13-9 Part 3

(3)	Compute inventory turnover. (Round your answers to 1 decimal place.)

 

 

6.

 

 

Exercise 13-9 Part 4

(4)	Compute days’ sales in inventory. (Use 365 days a year. Do not round intermediate calculations and round your final answers to the nearest whole number.)

 

2012
2011

 

Problem 13-1A Ratios, common-size statements, and trend percents L.O. P1, P2, P3

[The following information applies to the questions displayed below.]

Selected comparative financial statements of Bennington Company follow:

 

BENNINGTON COMPANY
Comparative Income Statements
For Years Ended December 31, 2012, 2011, and 2010
			2012				2011				2010
Sales		$	444,000			$	340,000			$	236,000
Cost of goods sold			267,288				212,500				151,040
Gross profit			176,712				127,500				84,960
Selling expenses			62,694				46,920				31,152
Administrative expenses			40,137				29,920				19,470
Total expenses			102,831				76,840				50,622
Income before taxes			73,881				50,660				34,338
Income taxes			13,764				10,370				6,962
Net income		$	60,117			$	40,290			$	27,376

 

BENNINGTON COMPANY
Comparative Balance Sheets
December 31, 2012, 2011, and 2010
			2012				2011				2010
Assets
Current assets		$	48,480			$	37,924			$	50,648
Long-term investments			0				500				3,720
Plant assets, net			90,000				96,000				57,000
Total assets		$	138,480			$	134,424			$	111,368
Liabilities and Equity
Current liabilities		$	20,200			$	19,960			$	19,480
Common stock			72,000				72,000				54,000
Other paid-in capital			9,000				9,000				6,000
Retained earnings			37,280				33,464				31,888
Total liabilities and equity		$	138,480			$	134,424			$	111,368

 

 

7.

 

Problem 13-1A Part 1

Required:
1.	Compute each year’s current ratio. (Round your answers to 1 decimal place.)

 

Current ratio	December 31, 2012:
Current ratio	December 31, 2011:
Current ratio	December 31, 2010:

 

8.

 

Problem 13-1A Part 2

2.	Express the income statement data in common-size percents. (Round your answers to 2 decimal places. Omit the “%” sign in your response.)

 

9.

Problem 13-1A Part 3

3.	Express the balance sheet data in trend percents with 2010 as the base year. (Round your answers to 2 decimal places. Leave no cells blank – be certain to enter “0” wherever required. Omit the “%” sign in your response.)