ACTG 3120 Lecture Notes - Lecture 9: Net Income, Cash Flow, Asset

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emeraldlouse520

18 Jan 2016

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O = net income preferred dividends (including cumulative of just that year: weighted average common shares outstanding. Only take p/s dividends for current year (declared or not) P/s retires at less than average issuance price, loss not included in net earnings but subtracted in the numerator of eps. Capital charge from convertible bonds that"s directed deducted from re is. Contingency issuable ordinary shares included in demonator when subtracted in earnings for eps conditions met (not issued) P/s fully participate in dividends then are ordinary shares for denominator. An historical amount, earnings more or less from its common shareholders. Cant compare to other companies but the company"s past only. Must be divided between discontinued operations and contining disclosed or on is: also for diluted eps. Shows the maximum dilution to eps tat could occur if all dilutative potential ordinary shares were issued. Indivated long-run impact that conversion will have on earnings attributable to common shares.

Related Questions

Stock Performance

Calculations:

Book value per common share: book value ofequity / common shares outstanding = Step by st for2015 =

Earnings per share (Basic) according to Income Statementis $5.07

Earnings per share (Diluted) according to IncomeStatement is $5.05

P/E Ratio: adjusted closing price / earningsper share (diluted) = Step by step for 2015=

Dividend yield: dividend per share / adjustedclosing price = Step by step for 2015=

Dividend payout: dividend per share / earningsper share (diluted) = Step by step for 2015=

Adjusted basic EPS: adjusted net income /Weighted average shares outstanding: basic

Adjusted diluted EPS: adjusted net income /Weighted average shares outstanding: diluted

Adjusted P/E ratio: adjusted closing price /adjusted diluted EPS

Adjusted dividend payout: Dividends per share /adjusted diluted EPS

Fiscal Year Ended	2/1/2015	2/2/2014	2/3/2013	1/29/2012
Book value per common share	?	?	?	?
Earnings per share (basic)	?	?	?	?
Earnings per share (diluted)	?	?	?	?
P/E Ratio	?	?	?	?
Dividend yield	?	?	?	?
Dividend payout	?	?	?	?
Adjusted Basic EPS	?	?	?	?
Adjusted Diluted EPS	?	?	?	?
Adjusted P/E Ratio	?	?	?	?
Adjusted dividend payout	?	?	?	?
Book value of equity	?	?	?	?
Common shares outstanding	?	?	?	?
Adjusted closing price	?	?	?	?
Dividends per share	?	?	?	?

Information:

WAL MART STORESINC
10-K

Statement of CashFlows

(Amounts in millions)
Fiscal Year Ended January 31,	2015	2014	2013	2012
Cash flows from operating activities:
Consolidated net income	$17,099	$16,695	$17,756	$16,387
(Income) Loss from discontinuedoperations, net of tax	(285)	(144)	(52)	21

Income from continuing operations	16,814	16,551	17,704	16,408

Adjustments to reconcileincome from continuing operations to net cash provided by operatingactivities
Depreciation and amortization	9,173	8,870	8,478	8,106
Deferred income taxes	(503)	(279)	(133)	1,050
Other operating activities	785	938	602	468

Changes in certain assets and liabilities,net of effects of acquisitions:
Increase in accounts receivable	(569)	(566)	(614)	(796)
Increase in inventories	(1,229)	(1,667)	(2,759)	(3,727)
Increase in accounts payable	2,678	531	1,061	2,687
Increase in accrued liabilities	1,249	103	271	30
(Decrease) Increase in accrued incometaxes	166	(1,224)	981	29

Net cash provided by operatingactivities	28,564	23,257	25,591	24,255

Cash flows from investing activities:
Payments for property and equipment	(12,174)	(13,115)	(12,898)	(13,510)
Proceeds from disposal of property andequipment	570	727	532	580
Proceeds from disposal of certainoperations	671	0	0	0
Other investing activities	(192)	(138)	(271)	(3,679)

Net cash used in investingactivities	(11,125)	(12,526)	(12,637)	(16,609)

Cash flows from financing activities:
Net change in short-term borrowings	(6,288)	911	2,754	3,019
Proceeds from issuance of long-termdebt	5,174	7,072	211	5,050
Payment of long-term debt	(3,904)	(4,968)	(1,478)	(4,584)
Dividends paid	(6,185)	(6,139)	(5,361)	(5,048)
Purchase of Company stock	(1,015)	(6,683)	(7,600)	(6,298)
Dividends paid to noncontrollinginterest	(600)	(426)	(282)	(526)
Purchase of noncontrolling interest	(1,844)	(296)	(132)	0
Other financing activities	(409)	(260)	(58)	(71)

Net cash used in financingactivities	(15,071)	(10,789)	(11,946)	(8,458)

Effect of exchange rates on cash	(514)	(442)	223	(33)

Net (decrease) increase in cash and cashequivalents	1,854	(500)	1,231	(845)
Cash and cash equivalents at beginning ofyear	7,281	7,781	6,550	7,395

Cash and cash equivalents at endof year	$9,135	$7,281	$7,781	$6,550


Supplemental disclosure of cash flowinformation
Income tax paid	8,169	8,641	7,304	5,889
Interest paid	2,433	2,362	2,262	2,346

WAL MART STORESINC
10-K

Balance Sheet

(Amounts in millions except per sharedata)
January 31,	2015	2014	2013	2012
ASSETS
Current assets:
Cash and cash equivalents	$9,135	$7,281	$7,781	$6,550
Receivables	6,778	6,677	6,768	5,937
Inventories	45,141	44,858	43,803	40,714
Prepaid expenses and other	2,224	1,909	1,551	1,685
Current assets of discontinuedoperations	0	460	37	89

Total current assets	$63,278	$61,185	$59,940	$54,975

Property and equipment, at cost	177,395	173,089	165,825	155,002
Less accumulated depreciation	(63,115)	(57,725)	(51,896)	(45,399)
Property and equipment, net	114,280	115,364	113,929	109,603

Property under capital lease	5,239	5,589	5,899	5,936
Less accumulated amortization	(2,864)	(3,046)	(3,147)	(3,215)
Property under capital lease, net	2,375	2,543	2,752	2,721

Goodwill	18,102	19,510	20,497	20,651
Other assets and deferred charges	5,671	6,149	5,987	5,456

Total assets	$203,706	$204,751	$203,105	$193,406

LIABILITIES ANDSHAREHOLDERS EQUITY
Current liabilities:
Short-term borrowings	$1,592	$7,670	$6,805	$4,047
Accounts payable	38,410	37,415	38,080	36,608
Accrued liabilities	19,152	18,793	18,808	18,154
Accrued income taxes	1,021	966	2,211	1,164
Long-term debt due within one year	4,810	4,103	5,587	1,975
Obligations under capital leases duewithin one year	287	309	327	326
Current liabilities of discontinuedoperations	0	89	0	26

Total currentliabilities	65,272	69,345	71,818	62,300

Long-term debt	41,086	41,771	38,394	44,070
Long-term obligations under capitalleases	2,606	2,788	3,023	3,009
Deferred income taxes and other	8,805	8,017	7,613	7,862
Redeemable non-controlling interest	0	1,491	519	404
Commitments and contingencies	0	0	0	0

Shareholders equity:
Common stock	323	323	332	342
Capital in excess of par value	2,462	2,362	3,620	3,692
Retained earnings	85,777	76,566	72,978	68,691
Accumulated other comprehensive income(loss)	(7,168)	(2,996)	(587)	(1,410)

Total Walmart shareholders' equity	81,394	76,255	76,343	71,315

Noncontrolling interest	4,543	5,084	5,395	4,446

Total equity	85,937	81,339	81,738	75,761

Total liabilities and shareholdersequity	$203,706	$204,751	$203,105	$193,406

WAL MART STORESINC
10-K

Income Statement

(Amounts in millions except per sharedata)
Fiscal Year Ended January 31,	2015	2014	2013	2012
Revenues:
Net sales	$482,229	$473,076	#######	$443,416
Membership and other income	3,422	3,218	3,047	3,093

	485,651	476,294	468,651	446,509
Costs and expenses:
Cost of sales	365,086	358,069	352,297	334,993
Operating, selling, general andadministrative expenses	93,418	91,353	88,629	85,025

Operating income	27,147	26,872	27,725	26,491

Interest:
Debt	2,161	2,072	1,977	2,034
Capital leases	300	263	272	286
Interest expense	2,461	2,335	2,249	2,320
Interest income	(113)	(119)	(186)	(161)

Interest, net	2,348	2,216	2,063	2,159

Income from continuing operations beforeincome taxes	24,799	24,656	25,662	24,332

Provision for income taxes:
Current	8,504	8,619	7,976	6,722
Deferred	(519)	(514)	(18)	1,202

Total provision for income taxes	7,985	8,105	7,958	7,924

Income from continuing operations	16,814	16,551	17,704	16,408
Income (Loss) from discontinuedoperations, net of tax	285	144	52	(21)

Consolidated net income	17,099	16,695	17,756	16,387

Consolidated net income attributable tononcontrolling interest	(736)	(673)	(757)	(688)

Consolidated net incomeattributable to Walmart	$16,363	$16,022	$16,999	$15,699

Net income per common share:
Basic income per common share fromcontinuing operations to Walmart	$5.01	$4.87	$5.03	$4.55
Basic income (loss) per common share fromdiscontinued operations	$0.06	$0.03	$0.01	($0.01)

Basic net income per common shareattributable to Walmart	$5.07	$4.90	$5.04	$4.54

Diluted income per common share fromcontinuing operations to Walmart	$4.99	$4.85	$5.01	$4.53
Diluted income (loss) per common sharefrom discontinued operations	$0.06	$0.03	$0.01	($0.01)

Diluted net income per common share	$5.05	$4.88	$5.02	$4.52

Weighted-average number of commonshares:
Basic	3,230	3,269	3,374	3,460
Diluted	3,243	3,283	3,389	3,474
Dividends declared per common share	$1.92	$1.88	$1.59	$1.46

Fiscal Year Ended	1/31/2015	1/31/2014	1/31/2013	1/31/2012
Adjusted Closing Price	$83.94	$71.97	$65.79	$56.32
Common Shares Outstanding (millions)	3,228	3,233	3,314	3,418

pucedinosaur653

For questions #6-18, refer to the following financialinformation for Plyler Overhead Door.

YOU MUST SHOW ALL CALCULATIONS TO EARNCREDIT.

2014 2015

BALANCE SHEETS:

Cash 120,000 160,000

AccountsReceivable 520,000 620,000

Inventory 305,000 290,000

Fixed Assets,net 410,000 510,000

TotalAssets 1,355,000 1,580,000

Liabilities and Equity:

AccountsPayable 350,000 $375,000

Long-termDebt 500,000 625,000

CommonStock 50,000 75,000

RetainedEarnings 455,000 505,000

Total Liabilities and Equity 1,355,000 1,580,000

INCOME STATEMENT:

Revenue 3,500,000

Cost of GoodsSold 2,275,000

General andAdministrative 515,000

DepreciationExpense 120,000

Earnings Before Interest andTaxes 590,000

InterestExpense 40,000

Pretax NetIncome 550,000

IncomeTaxes 187,000

NetIncome 363,000

What was Plylerâs total current assets at the end of 2015?

What was Plylerâs net working capital at the end of 2015?

What was Plylerâs shareholdersâ equity at book value at the endof 2015?

An appraiser recently valued Plylerâs fixed assets at $600,000and determined that $40,000 of their accounts receivable wasnoncollectible. Based on only this information, what was the marketvalue of Plylerâs shareholdersâ equity at the end of 2015?

Assuming that Plyler did not buy back or redeem any of itsshares, how much new common stock did it issue in 2015?

How much dividends did Plyler pay out to its shareholders in2015?

What was Plylerâs effective annual average tax rate in 2015?

If Plyler had 10,000 shares of common stock outstandingthroughout 2015, what was its Earnings per Share (EPS) in 2015?

Assuming that Plyler didnât dispose of any of its fixed assets,how much new capital spending did it incur in 2015?

What was Plylerâs Operating Cash Flow (OCF) in 2015?

What was Plylerâs investment in net working capital for2015?

What was Plylerâs Cash Flow to Creditors in 2015?

What was Plylerâs Cash Flow to Stockholders in 2015?

pinkclam337

Prepare a multiple-step income statement for the year endedDecember 31, 2016, concluding with earnings per share. In computingearnings per share, assume that the average number of common sharesoutstanding was 100,000 and preferred dividends were $100,000.(Round earnings per share to the nearest cent.)

â¢

Refer to the Chart of Accounts for exact wording of accounttitles.

â¢

Refer to the Labels and Amount Descriptions for exact wording oftext entries.

Prepare a retained earnings statement for the year endedDecember 31, 2016.

â¢	Refer to the Chart of Accounts for exact wording of accounttitles.
â¢	Refer to the Labels and Amount Descriptions for exact wordingof text entries.
â¢	You will need to enter the word âLessâ or âAddâ asnecessary.

Prepare a balance sheet in report form as of December 31, 2016.You are not required to present the details of Preferred and CommonStock (i.e., number of shares authorized, issued and outstanding).

â¢	Refer to the Chart of Accounts for exact wording of accounttitles.
â¢	Refer to the Labels and Amount Descriptions for exact wordingof text entries.
â¢	âLessâ , âDeductâ, âAddâ and colons will appearautomatically.
â¢	Available-for-sale investments should be reported as a singleasset on the balance sheet, regardless of how many accounts existin the ledger for such assets.
â¢	Recall that current assets are to be reported in order ofliquidity. Available-for-sale investments are considered to be moreliquid that accounts receivable.
â¢	Report fixed assets and paid-in capital accounts inaccount-number order.
â¢	Omit the description of bonds and stocks (i.e., percentagerates, due date, number of shares, etc.)
â¢	Enter all amounts as positive numbers, with one exception: Ifan unrealized loss has occurred, it must be reported as a negativeamount on the balance sheet.

Labels

In CengageNOW, a Label is a text entry that does not have anamount associated with it.

Current assets

Current liabilities

December 31, 2016

For the Year Ended December 31, 2016

Intangible assets

Investments

Less dividends

Long-term liabilities

Operating expenses

Other income and expenses

Paid-in capital

Add dividends

Property, plant, and equipment

Amount Descriptions

In CengageNOW, an Amount Description is a text entry other thanan Account that has an amount associated with it.

Available-for-sale investments

Decrease in retained earnings

Excess of issue price over par

Gross profit

Income before income tax

Income from operations

Increase in retained earnings

Miscellaneous selling expense

Net income

Net loss

Retained earnings, January 1, 2016

Retained earnings, December 31, 2016

Sales commissions

Sales salaries expense

Store supplies expense

Total administrative expenses

Total assets

Total (before treasury stock)

Total current assets

Total current liabilities

Total liabilities

Total liabilities and stockholdersâ equity

Total long-term liabilities

Total investments

Total operating expenses

Total paid-in capital

Total property, plant, and equipment

Total selling expenses

Total stockholdersâ equity

Unamortized premium

Unamortized discount

Income Statement data:
Advertising expense	$ 150,000
Cost of merchandise sold	3,700,000
Delivery expense	30,000
Depreciation expense-office buildings and equipment	30,000
Depreciation expense-store buildings and equipment	100,000
Dividend revenue	4,500
Gain on sale of investments	4,980
Income from Pinkberry Co. investment	76,800
Income tax expense	140,500
Interest expense	21,000
Interest revenue	2,720
Miscellaneous administrative expense	7,500
Miscellaneous selling expense	14,000
Office rent expense	50,000
Office salaries expense	170,000
Office supplies expense	10,000
Sales	5,254,000
Sales commissions	185,000
Sales salaries expense	385,000
Store supplies expense	21,000

Retained earnings and balance sheet data:
Accounts payable	$ 194,300
Accounts receivable	545,000
Accumulated depreciationâoffice buildings and equipment	1,580,000
Accumulated depreciationâstore buildings and equipment	4,126,000
Allowance for doubtful accounts	8,450
Available-for-sale investments (at cost)	260,130
Bonds payable, 5%, due 2024	500,000
Cash	246,000
Common stock, $20 par
(400,000 shares authorized; 100,000 shares issued, 94,600outstanding)	2,000,000
Dividends:
Cash dividends for common stock	155,120
Cash dividends for preferred stock	100,000
Goodwill	500,000
Income tax payable	44,000
Interest receivable	1,125
Investment in Pinkberry Co. stock (equity method)	1,009,300
Investment in Dream Inc. bonds (long term)	90,000
Merchandise inventory (December 31, 2016),
at lower of cost (FIFO) or market	778,000
Office buildings and equipment	4,320,000
Paid-in capital from sale of treasury stock	13,000
Excess of issue price over par:
-Common	886,800
-Preferred	150,000
Preferred 5% stock, $80 par
(30,000 shares authorized; 20,000 shares issued)	1,600,000
Premium on bonds payable	19,000
Prepaid expenses	27,400
Retained earnings, January 1, 2016	9,319,725
Store buildings and equipment	12,560,000
Treasury stock
(5,400 shares of common stock at cost of $33 per share)	178,200
Unrealized gain (loss) on available-for-sale investments	(6,500)
Valuation allowance for available-for-sale investments	(6,500)

none

Chart of Accounts

CHART OF ACCOUNTS

Equinox Products Inc.

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
131	Merchandise Inventory
132	Interest Receivable
133	Prepaid Expenses
141	Investments-Solstice Corp.
142	Investment in Pinkberry Co. Stock
143	Investment in Dream Inc. Bonds
144	Valuation Allowance for Available-for-Sale Investments
181	Store Buildings and Equipment
182	Accumulated Depreciation-Store Buildings and Equipment
183	Office Buildings and Equipment
184	Accumulated Depreciation-Office Buildings and Equipment
191	Goodwill

	LIABILITIES
211	Accounts Payable
221	Income Tax Payable
225	Cash Dividends Payable
251	Bonds Payable
252	Discount on Bonds Payable
253	Premium on Bonds Payable

	EQUITY
311	Preferred Stock
312	Paid-in Capital in Excess of Par-Preferred Stock
321	Common Stock
322	Paid-in Capital in Excess of Par-Common Stock
331	Retained Earnings
341	Cash Dividends
351	Treasury Stock
352	Paid-in Capital from Sale of Treasury Stock
361	Unrealized Gain (Loss) on Available-for-Sale Investments

	REVENUE
410	Sales
611	Dividend Revenue
621	Interest Revenue
631	Income from Pinkberry Co.
641	Gain on Sale of Investments

	EXPENSES
511	Cost of Merchandise Sold
512	Bad Debt Expense
520	Sales Salaries Expense
521	Sales Commissions
522	Office Salaries Expense
531	Advertising Expense
532	Delivery Expense
537	Store Supplies Expense
538	Office Supplies Expense
539	Office Rent Expense
541	Income Tax Expense
551	Depreciation Expense-Store Equipment
552	Depreciation Expense-Office Equipment
591	Miscellaneous Selling Expense
592	Miscellaneous Administrative Expense
710	Interest Expense
731	Loss on Sale of Investments

none

Labels and Amount Descriptions

Labels In CengageNOW, a Label is a text entry that does not have anamount associated with it.
Current assets
Current liabilities
December 31, 2016
For the Year Ended December 31, 2016
Intangible assets
Investments
Less dividends
Long-term liabilities
Operating expenses
Other income and expenses
Paid-in capital
Add dividends
Property, plant, and equipment
Amount Descriptions In CengageNOW, an Amount Description is a text entry other thanan Account that has an amount associated with it.
Available-for-sale investments
Decrease in retained earnings
Excess of issue price over par
Gross profit
Income before income tax
Income from operations
Increase in retained earnings
Miscellaneous selling expense
Net income
Net loss
Retained earnings, January 1, 2016
Retained earnings, December 31, 2016
Sales commissions
Sales salaries expense
Store supplies expense
Total administrative expenses
Total assets
Total (before treasury stock)
Total current assets
Total current liabilities
Total liabilities
Total liabilities and stockholdersâ equity
Total long-term liabilities
Total investments
Total operating expenses
Total paid-in capital
Total property, plant, and equipment
Total selling expenses
Total stockholdersâ equity
Unamortized premium
Unamortized discount

copperwombat133

ACTG 3120 Lecture Notes - Lecture 9: Net Income, Cash Flow, Asset

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