prepare an Income Statement (multi-step), Statement of Comprehensive Income and Statement of Retained Earnings.
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K 11
Mars Corporation reported the following information for the year ended March 31, 2021
Administrative expenses $ 15,000
Cost of goods sold 60,000
Dividends paid by Mars to its shareholders 18,000
Dividends received by Mars from investments 10,000
Error calculating cost of goods sold in 2019 (increase income) 13,000
Interest earned on available-for-sale debt securities 6,000
Unrealized gain on hedging transactions 8,000
Loss on sale of debt securities 14,000
Net Sales 150,000
Selling expenses 12,000
Ignoring income taxes and earnings per share, prepare an Income Statement (multi-step), Statement of Comprehensive Income and Statement of Retained Earnings. Be sure to include line descriptions for Gross profit and Income from operations, and include headings, dollar signs and underlines as appropriate.
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- Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on the liquidity metric working capital and profitability metric gross profit percent. Indicate the gross profit percent for each sale (rounding to one decimal place) in parentheses next to the effect of the sale on the company’s ability to attain an overall gross profit percent of 30%.Indigo Corporation Indigo Corporation Balance Sheets December 31 Income Statements For the Years Ended December 31 2020 2019 2020 2019 2018 Sales revenue $ 21,000 $606,000 $ 31,000 $ 19,000 $746,000 Cash Less: Sales returns and allowances 41,000 31,000 Accounts receivable (net) 49,000 51,000 46,000 Other current assets 96,000 Net sales 101,000 70,000 705,000 575,000 76,000 51,000 431,000 Investments 61,000 Cost of goods sold 356,000 500,000 370,000 358,000 Gross profit Plant and equipment (net) 274,000 219,000 $739,000 $614,000 $547,000 Operating expenses (including income taxes) 181,000 151,000 $ 68,000 $ 93,000 $ 86,000 $ 81,000 $ 71,000 Current liabilities Net income Long-term debt 151,000 91,000 56,000 Additional information: Common stock, $10 par 306,000 326,000 316,000 126,000 Retained earnings 176,000 114,000 The market price of Indigo's common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. 1. You must compute dividends paid. All dividends were paid in…Al-Itihad Corporation Balance Sheet December 31, 2019 Assets Liability & Equity Current Assets Current Liability Cash $5,000 Accounts payable 22,000 Short term securities 10,000 Accrual Account 8,000 Account Receivables 30,000 Short term debt 6,000 Inventory 32,000 Total Current Liability 36,000 Long-term debt 40,000 Total Current Assets 77,000 Total Liability 76,000 Long term Assets Equity Net Property & equipment 70,000 Common Stocks 64,000 Retained earnings 17,000 Total Equity 81,000 Total Liability and Equity 157,000 Other assts 10000 Total Assets 157,000 Sur Corporation Income Statement December 31, 2019 Other Financial information of Sur corporation December 31, 2019 Net sales (revenue) $150,000 · Average Number of Common shares outstanding 16,000 Shares · Market…
- Al-Itihad Corporation Balance Sheet December 31, 2019 Assets Liability & Equity Current Assets Current Liability Cash $5,000 Accounts payable 22,000 Short term securities 10,000 Accrual Account 8,000 Account Receivables 30,000 Short term debt 6,000 Inventory 32,000 Total Current Liability 36,000 Long-term debt 40,000 Total Current Assets 77,000 Total Liability 76,000 Long term Assets Equity Net Property & equipment 70,000 Common Stocks 64,000 Retained earnings 17,000 Total Equity 81,000 Total Liability and Equity 157,000 Other assts 10000 Total Assets 157,000 Sur Corporation Income Statement December 31, 2019 Other Financial information of Sur corporation December 31, 2019 Net sales (revenue) $150,000 · Average Number of Common shares outstanding 16,000 Shares · Market price of…Al-Itihad Corporation Balance Sheet December 31, 2019 Assets Liability & Equity Current Assets Current Liability Cash $5,000 Accounts payable 22,000 Short term securities 10,000 Accrual Account 8,000 Account Receivables 30,000 Short term debt 6,000 Inventory 32,000 Total Current Liability 36,000 Long-term debt 40,000 Total Current Assets 77,000 Total Liability 76,000 Long term Assets Equity Net Property & equipment 70,000 Common Stocks 64,000 Retained earnings 17,000 Total Equity 81,000 Total Liability and Equity 157,000 Other assts 10000 Total Assets 157,000 Sur Corporation Income Statement December 31, 2019 Other Financial information of Sur corporation December 31, 2019 Net sales (revenue) $150,000 · Average Number of Common shares outstanding 16,000 Shares · Market…Al-Itihad Corporation Balance Sheet December 31, 2019 Assets Liability & Equity Current Assets Current Liability Cash $5,000 Accounts payable 22,000 Short term securities 10,000 Accrual Account 8,000 Account Receivables 30,000 Short term debt 6,000 Inventory 32,000 Total Current Liability 36,000 Long-term debt 40,000 Total Current Assets 77,000 Total Liability 76,000 Long term Assets Equity Net Property & equipment 70,000 Common Stocks 64,000 Retained earnings 17,000 Total Equity 81,000 Total Liability and Equity 157,000 Other assts 10000 Total Assets 157,000 Sur Corporation Income Statement December 31, 2019 Other Financial information of Sur corporation December 31, 2019 Net sales (revenue) $150,000 · Average Number of Common shares outstanding 16,000 Shares · Market price…
- Global Corp. initially projected the 2019 income statement shown in the table E. Suppose that in 2019, Global launched an aggressive marketing campaign that boosted 2019 sales further by 14.1%. However, their operating margin fell from 5.56% to 4.49% Suppose that they had no other income, interest expenses were unchanged, and taxes were the same percentage of pretax income (26%) as in 2018. a. What was Global's EBIT in 2019? b. What was Global's income in 2019? c. If Global's P/E ratio (18.0) and number of shares outstanding (3.6 million) remained unchanged, what was Global's share price in 2019? a. What was Global's EBIT in 2019? Global's EBIT was $ million. (Round to two decimal places.) b. What was Global's income in 2019? Net income was $ million. (Round to two decimal places.) c. If Global's P/E ratio (18.0) and number of shares outstanding (3.6 million) remained unchanged, what was Global's share price in 2019? Global's share price in 2019 was $. (Round to the nearest cent.)Question 3 ABC Company Ltd. has annual revenues of $750 million and annual cost of goods sold of $450 million. Annual cash flows from operations are $51 million, while daily credit sales were $163,548. It published its annual report for the financial year 2021- 22 ending, with the following balance sheet items as at 31 march 2022: Ending inventory: $82 million Ending accounts receivable: $56 million Ending accounts payable: $43 million ● ABC Co. Ltd. treasurers forecast the following balance pattern for monthly collections: ● ● ● Month 0: 5% Month 1: 40% Month 2: 35% Month 3: 15% Month 4: 5% Required: a) Calculate the Cash Conversion Cycle (CCC) for the company and discuss measures the company could adopt to shorten its CCC. b) What percentage of outstanding sales proceeds are yet to be collected as receivables 3 months after the sales were invoiced?Category Prior Year Current Year Accounts payable 3,147.00 5,976.00 Accounts receivable 6,925.00 8,910.00 Accruals 5,635.00 6,187.00 Additional paid in capital 19,527.00 13,950.00 Cash ??? ??? Common Stock 2,850 2,850 COGS 22,974.00 18,270.00 Current portion long-term debt 500 500 Depreciation expense 975.00 976.00 Interest expense 1,278.00 1,155.00 Inventories 3,048.00 6,717.00 Long-term debt 16,569.00 22,919.00 Net fixed assets 75,968.00 73,882.00 Notes payable 4,045.00 6,584.00 Operating expenses (excl. depr.) 19,950 20,000 Retained earnings 35,870.00 34,759.00 Sales 46,360 45,347.00 Taxes 350 920 What is the firm's cash flow from operations? What is the firm's dividend payment in the current year? What is the firm's net income in the current year?
- Category Prior Year Current Year Accounts payable ??? ??? Accounts receivable 320,715 397,400 Accruals 40,500 33,750 Additional paid in capital 500,000 541,650 Cash 17,500 47,500 Common Stock 94,000 105,000 COGS 328,500 428,571.00 Current portion long-term debt 33,750 35,000 Depreciation expense 54,000 54,035.00 Interest expense 40,500 42,155.00 Inventories 279,000 288,000 Long-term debt 339,577.00 401,377.00 Net fixed assets 946,535 999,000 Notes payable 148,500 162,000 Operating expenses (excl. depr.) 126,000 162,171.00 Retained earnings 306,000 342,000 Sales 639,000 849,094.00 Taxes 24,750 47,192.00 What is the current year's entry for long-term debt on a common-sized balance sheet? (ROUND TO 4 DECIMAL PLACES.)PROBLEM 8:Tomas Co. has the following balance sheet as of December 31, 2021.Current assets 180,000.00Fixed assets 120,000.00Total assets 300,000.00Accounts payable 40,000.00Accrued liabilities 20,000.00Notes payable 50,000.00Other Long-term debt 75,000.00Total Equity 115,000.00Total liabilities and equity 300,000.00 In 2021, Tomas Co. reported sales of P1,500,0000, net income of P30,000, and dividends of P18,000. The company expected its sales to increase by 20% by next year and its retention ratio will remain at 40%. Assume that Tomas Co. is operating at full capacity and it uses the AFN approach in determining the amount of external financing needed.How much is the sales for 2022? Using Problem 8, how much is the increase in retained earnings for the purpose of computing the AFN? Using Problem 8, how much external funds needed for the year 2022?Exercise 5-9 During the next fiscal year ending June 30.2020, Texas Company will make substantial investments in new product lines and in a modernization program. Significant changes to be made during the year are listed below: 1. Equipment with a net book value of P86,000 will be sold during the year. 2. All of the capital stock of Ohio Company will be exchanged with 5,000 shares of Texas Company at a time when the market value is P40 per share. P250,000 cash will also be given as part payment. 3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at 98%. 4. Trading securities carried at market value of P200,000 will be sold for P215,000. 5. New equipment will be purchased during the year. 6. A new building will be purchased at a cost of P1,000,000, although there are no building retirements. 7. Cash dividends will be paid to stockholders. The financial statements forccast for the year ended June 30, 2020 are given next page:
