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ADMS 2510 Lecture Notes - Lecture 10: Financial Statement, Accounts Payable, Cash Flow Statement

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School
York University
Department
Administrative Studies
Course
ADMS 2510
Professor
Terry Conlin

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ADMS 2510 Full Course Notes
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ADMS 2510 Full Course Notes
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Use the information on deep corp for questions 1 to 25. Financial statements income statement for 2012 and comparative balance sheet for diving equipment manufacturer deep corp (deep) for december 31, 2012 and 2011. Deep corp. - income statement as of december 31st, 2012. Deep corp. - balance sheet - december 31. You shall prepare both an indirect and direct cash flow statement to answer the questions below. Questions 1 to 7 are for the cash flow statement for deep corp. prepared by using the. Note: the answers are the way the numbers will appear on the direct cash flow direct method. The total amount of cash receipts from customers is: a). b). c). d). e). ,850 more than ,200 not enough data to calculate it. The total amount of cash payments to suppliers is: a). b). c). d). e). The total cash payments for operating expenses are: a). b). c). d). e).

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Related Questions

Presentedbelow are the 2011 income statement and comparative balance
sheet for Siegfried & Royce.
Siegfried & Royce
Income Statement
For the Year Ended December 31, 2011
($ inthousands)
Sales revenue $12,500
Operating expenses:
Cost of goods sold 7300
Depreciation 400
Rent 250
Administrative and other 2200
Total operating expenses 10,150
Income before income taxes 2,350
Income tax expense 940
Net income $1,410
Balance Sheet information ($ in thousands) Dec. 31, 2011 Dec. 31, 2010
Assets:
Cash $3,280 $1,300
Accounts receivable 1,250 980
Inventory 980 900
Prepaid rent 150 100
Plant & equipment 3,000 2,600
Less: Accumulated depreciation -1,200 -800
Totalassets $7,460 $5,080
Liabilities and shareholders’ equity:
Accounts payable $500 $580
Payables for administrative and other expenses 650 700
Income taxes payable 450 350
Note payable (due 12/31/2012) 2,500 2,000
Common stock 1,500 1,000
Retained earnings 1,860 450
Totalliabilities and shareholders’ equity $7,460 $5,080

Required: Prepare a Statement of Cash Flows using the directmethod for operating activities. Assume that all purchases andsales of inventory are on account, and that there are noanticipated bad debts for accounts receivable.

TIP: Use T accounts for the pertinent items toisolate the information for the statement

The following income statement and balance sheet for Virtual Gaming Systems are provided. Earnings per share for the year ended December 31, 2012, are $1.00. The closing stock price on December 31, 2012, is $28.00.

VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,051,000
Cost of goods sold 1,969,000

Gross profit 1,082,000
Expenses:
Operating expenses 869,000
Depreciation expense 42,000
Loss on sale of land 9,000
Interest expense 16,900
Income tax expense 49,400


Total expenses 986,300

Net income $ 95,700

VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 190,000 $ 157,000
Accounts receivable 97,000 74,000
Inventory 106,000 146,000
Prepaid rent 12,000 8,000
Long-term assets:
Investment in bonds 129,000 0
Land 220,000 250,000
Equipment 239,000 181,000
Less: Accumulated depreciation (71,000) (29,000)

Total assets $ 922,000 $ 787,000

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 67,000 $ 81,000
Interest payable 6,000 23,000
Income tax payable 19,000 29,000
Long-term liabilities:
Notes payable 292,000 237,000
Stockholders' equity:
Common stock 303,000 281,000
Retained earnings 235,000 136,000

Total liabilities and stockholders’ equity $ 922,000 $ 787,000

Required:

Calculate the following profitability ratios for 2012. (Round your answers to 1 decimal place. Omit the "%" sign in your response.)

Profitability Ratios
1. Gross profit ratio %
2. Return on assets %
3. Profit margin %
4. Asset turnover times
5. Return on equity %
6. Price-earnings ratio times

The following income statement and balance sheet for Virtual Gaming Systems are provided.

VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,039,000
Cost of goods sold 1,951,000

Gross profit 1,088,000
Expenses:
Operating expenses 868,000
Depreciation expense 42,000
Loss on sale of land 9,400
Interest expense 16,200
Income tax expense 48,600


Total expenses 984,200

Net income $ 103,800

VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 217,000 $ 152,000
Accounts receivable 117,000 70,000
Inventory 116,000 138,000
Prepaid rent 28,000 26,000
Long-term assets:
Investment in bonds 130,000 0
Land 219,000 241,000
Equipment 165,000 169,000
Less: Accumulated depreciation (72,000) (30,000)

Total assets $ 920,000 $ 766,000

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 76,000 $ 93,000
Interest payable 6,000 8,000
Income tax payable 19,000 27,000
Long-term liabilities:
Notes payable 286,000 233,000
Stockholders' equity:
Common stock 298,000 263,000
Retained earnings 235,000 142,000

Total liabilities and stockholders’ equity $ 920,000 $ 766,000

Required:

Assuming that all sales were on account, calculate the following risk ratios for 2012. (Round your intermediate and final answers to 1 decimal place. Omit the "%" sign in your response)

Risk Ratios
1. Receivables turnover ratio times
2. Average collection period days
3. Inventory turnover ratio times
4. Average days in inventory days
5. Current ratio to 1
6. Acid-test ratio to 1
7. Debt to equity ratio %
8. Times interest earned ratio times