Nelson Co.
Income Statement
For the years ending
12/31/13
12/31/14
Sales
$8,500,000
$9,150,000
Cost of goods sold
4,500,000
5,350,000
Gross profit
Selling Expense
1,600,000
1,900,000
Administrative expense
1,300,000
1,400,000
Income from operations
Other Income
40,000
150,000
Interest expense
50,000
30,000
Income before taxes
Income taxes 25%
Net Income
Nelson Co.
Retained Earnings Statement
For the years ending
12/31/13
12/31/14
Retained Earnings â Beg. Balance
$3,758,000
Net income
Preferred dividends
Common dividends
50,000
50,000
Retained Earnings- Ending Balance
Nelson Co.
Balance Sheet
As of
12/31/13
12/31/14
Assets
Current Assets:
Cash
300,000
250,000
Short term investments
910,000
800,000
Account receivable
540,000
410,000
Inventory
990,000
950,000
Prepaid expenses
250,000
210,000
Total current assets
Long term investments
1,800,000
1,900,000
Land Buildings Equipment
3,240,000
3,466,000
Total Assets
Liabilities
Current Liabilities:
979,000
780,000
Long term Liabilities:
Mortgage Payable 8% due 2025
200,000
90,000
Bonds payable $5
1,400,000
1,300,000
Total Liabilities
Shareholdersâ Equity
Preferred stock $10 par 10%
500,000
500,000
Common Stock, $5 par
400,000
400,000
Retained Earning
Total shareholdersâ equity
Total Liabilities & shareholdersâ equity
Fill in the blanks on the financial statements.
Nelson Co.
Income Statement
For the years ending
12/31/13 | 12/31/14 | |
Sales | $8,500,000 | $9,150,000 |
Cost of goods sold | 4,500,000 | 5,350,000 |
Gross profit | ||
Selling Expense | 1,600,000 | 1,900,000 |
Administrative expense | 1,300,000 | 1,400,000 |
Income from operations | ||
Other Income | 40,000 | 150,000 |
Interest expense | 50,000 | 30,000 |
Income before taxes | ||
Income taxes 25% | ||
Net Income |
Nelson Co.
Retained Earnings Statement
For the years ending
12/31/13 | 12/31/14 | |
Retained Earnings â Beg. Balance | $3,758,000 | |
Net income | ||
Preferred dividends | ||
Common dividends | 50,000 | 50,000 |
Retained Earnings- Ending Balance |
Nelson Co.
Balance Sheet
As of
12/31/13 | 12/31/14 | |
Assets | ||
Current Assets: | ||
Cash | 300,000 | 250,000 |
Short term investments | 910,000 | 800,000 |
Account receivable | 540,000 | 410,000 |
Inventory | 990,000 | 950,000 |
Prepaid expenses | 250,000 | 210,000 |
Total current assets | ||
Long term investments | 1,800,000 | 1,900,000 |
Land Buildings Equipment | 3,240,000 | 3,466,000 |
Total Assets | ||
Liabilities | ||
Current Liabilities: | 979,000 | 780,000 |
Long term Liabilities: | ||
Mortgage Payable 8% due 2025 | 200,000 | 90,000 |
Bonds payable $5 | 1,400,000 | 1,300,000 |
Total Liabilities | ||
Shareholdersâ Equity | ||
Preferred stock $10 par 10% | 500,000 | 500,000 |
Common Stock, $5 par | 400,000 | 400,000 |
Retained Earning | ||
Total shareholdersâ equity | ||
Total Liabilities & shareholdersâ equity |
Fill in the blanks on the financial statements.
Related questions
Nelson Co.
Income Statement
For the years ending
12/31/13 | 12/31/14 | |
Sales | $8,500,000 | $9,150,000 |
Cost of goods sold | 4,500,000 | 5,350,000 |
Gross profit | ||
Selling Expense | 1,600,000 | 1,900,000 |
Administrative expense | 1,300,000 | 1,400,000 |
Income from operations | ||
Other Income | 40,000 | 150,000 |
Interest expense | 50,000 | 30,000 |
Income before taxes | ||
Income taxes 25% | ||
Net Income |
Nelson Co.
Retained Earnings Statement
For the years ending
12/31/13 | 12/31/14 | |
Retained Earnings â Beg. Balance | $3,758,000 | |
Net income | ||
Preferred dividends | ||
Common dividends | 50,000 | 50,000 |
Retained Earnings- Ending Balance |
Nelson Co.
Balance Sheet
As of
12/31/13 | 12/31/14 | |
Assets | ||
Current Assets: | ||
Cash | 300,000 | 250,000 |
Short term investments | 910,000 | 800,000 |
Account receivable | 540,000 | 410,000 |
Inventory | 990,000 | 950,000 |
Prepaid expenses | 250,000 | 210,000 |
Total current assets | ||
Long term investments | 1,800,000 | 1,900,000 |
Land Buildings Equipment | 3,240,000 | 3,466,000 |
Total Assets | ||
Liabilities | ||
Current Liabilities: | 979,000 | 780,000 |
Long term Liabilities: | ||
Mortgage Payable 8% due 2025 | 200,000 | 90,000 |
Bonds payable $5 | 1,400,000 | 1,300,000 |
Total Liabilities | ||
Shareholdersâ Equity | ||
Preferred stock $10 par 10% | 500,000 | 500,000 |
Common Stock, $5 par | 400,000 | 400,000 |
Retained Earning | 4,475,500 | 4,840,500 |
Total shareholdersâ equity | ||
Total Liabilities & shareholdersâ equity |
Fill in the blanks on the financial statements.
Star Industries Inc comparative financial statements for theyears ending December 31, 2010 and 2009, are as follows. The marketprice for Star Industries common stock was $ 20 on December 31,2009, and $ 32 on December 31, 2010. Common stockshares outstanding for both 2010 and 2009 are 70000 shares (Ie $700,000 / $ 10 par)
Star Industries
Comparative Income Statement
For the Years Ended December 31, 2010 and 2009
2010 | 2009 | ||
Sales | $7,000,000 | $5,670,000 | |
Sales returns and allowances | $325,000 | $175,000 | |
Net Sales | $6,675,000 | $5,495,000 | |
Cost of Goods Sold | $4,850,000 | $3,950,000 | |
Gross Profit | $1,825,000 | $1,545,000 | |
Selling Expenses | $780,000 | $464,000 | |
Administrative Expenses | $485,000 | $423,000 | |
Total Operating Expenses | $1,465,000 | $887,000 | |
Income From Operations | $360,000 | $658,000 | |
Other Income | $25,000 | $19,200 | |
Earnings before Interest & taxes (EBIT) | $385,000 | $677,200 | |
Other Expenses (interest) | $105,000 | $64,000 | |
Income Before Income Tax | $280,000 | $613,200 | |
Income Tax Expense | $35,000 | $176,000 | |
Net Income | $245,000 | $437,200 |
`
Star Industries
Comparative Retained Earnings Statement
For the Years Ended December 31, 2010 and 2009
2010 | 2009 | ||
Retained Earnings, Januray 1 | $ 723,000 | $ 355,800 | |
Add Net Income for year | $245,000 | $437,200 | |
Total | $ 968,000 | $ 793,000 | |
Deduct dividends: | |||
Preferred Stock | $ 40,000 | $ 40,000 | |
Common Stock | $ 45,000 | $ 30,000 | |
Total | $ 85,000 | $ 70,000 | |
Retained Earnings, December 31 | $883,000 | $ 723,000 |
Star Industries
Comparative Balance Statement
December 31, 2010 and 2009
12-31-2010 | 12-31-2009 | ||||
Assets | |||||
Current Assets | |||||
Cash | $235,000 | $215,000 | |||
Temporary Investments | $10,000 | $50,000 | |||
Accounts Receivable(Net) | $525,000 | $425,000 | |||
Inventories | $940,000 | $580,000 | |||
Prepaid Expenses | $30,000 | $20,000 | |||
Total Current Assets | $1,740,000 | $1,290,000 | |||
Long-Term Investments | $165,000 | $135,000 | |||
Property, Plant and Equipment (Net) | $2,525,000 | $1,878,000 | |||
Total Assets | $4,430,000 | $3,303,000 | |||
Liabilities | |||||
Current Liabilities | $950,000 | $780,000 | |||
Long-Term Liabilities | |||||
Mortgage Note Payable 8%(due 2013) | $410,000 | $0 | |||
Bonds Payable, 7% (due2016) | $1,200,000 | $800,000 | |||
Total Long Term Liabilities | $1,610,000 | $800,000 | |||
Total Liabilities | $2,560,000 | $1,580,000 | |||
Stockholders' Equity | |||||
Preferred 8% stock, $ 100 Par | $300,000 | $300,000 | |||
Common Stock, $ 10 Par | $700,000 | $700,000 | |||
Retained Earnings | $883,000 | $723,000 | |||
Total Stockholders' Equity | $1,883,000 | $1,723,000 | |||
Total Liabilities and Stockholders' Equity | $4,443,000 | $3,303,000 | |||
Determine the following measures for 2010: Compare withindustry norms and comment:
Ratios | Industry Norm | ||||
1. Working Capital | N/A | ||||
2. Current Ratio | 2.2 | ||||
3. Quick Ratio | 0.8 | ||||
4. Accounts Receivable Turnover | 16.0 | ||||
5. Number of days sales in receivables | 22.2 | ||||
6. Inventory Turnover | 5.0 | ||||
7. Number of days sales in inventory | 75.0 | ||||
8. Ratio of fixed assets to long-term liabilites | 2.0 | ||||
9. Ratio of liabilities to stockkholders equity | 0.7 | ||||
10. Number of times interest charges are earned | 8.5 | ||||
11. Number of times preferred dividends earned | 7.1 | ||||
12. Ratio of net sales to assets | 2.1 | ||||
13. Rate earned on total assets | 8.5% | ||||
14. Rate earned on stockholders' equity | 12.0% | ||||
15. Rate earned on common stockholders' equity | 14.2% | ||||
16. Earnings per share on common stock | $3.65 | ||||
17. Price-earnings ratio | 9.2 | ||||
18. Dividends per share | $0.80 | ||||
19. Dividend yield | 2.50% | ||||
Thanks!
Measures of liquidity, solvency, and profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
| Marshall Inc. | ||
| Comparative Retained Earnings Statement | ||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||
| 20Y2 | 20Y1 | |
| Retained earnings, January 1 | $3,704,000 | $3,264,000 |
| Net income | $ 600,000 | $ 550,000 |
| Dividends: | ||
| On preferred stock | (10,000) | (10,000) |
| On common stock | (100,000) | (100,000) |
| Increase in retained earnings | $ 490,000 | $ 440,000 |
| Retained earnings, December 31 | $4,194,000 | $3,704,000 |
| Marshall Inc. | ||
| Comparative Income Statement | ||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||
| 20Y2 | 20Y1 | |
| Sales | $ 10,850,000 | $10,000,000 |
| Cost of goods sold | (6,000,000) | (5,450,000) |
| Gross profit | $ 4,850,000 | $ 4,550,000 |
| Selling expenses | $ (2,170,000) | $ (2,000,000) |
| Administrative expenses | (1,627,500) | (1,500,000) |
| Total operating expenses | $(3,797,500) | $ (3,500,000) |
| Operating income | $ 1,052,500 | $ 1,050,000 |
| Other revenue and expense: | ||
| Other revenue | 99,500 | 20,000 |
| Other expense (interest) | (132,000) | (120,000) |
| Income before income tax expense | $ 1,020,000 | $ 950,000 |
| Income tax expense | (420,000) | (400,000) |
| Net income | $ 600,000 | $ 550,000 |
| Marshall Inc. | ||
| Comparative Balance Sheet | ||
| December 31, 20Y2 and 20Y1 | ||
| 20Y2 | 20Y1 | |
| Assets | ||
| Current assets: | ||
| Cash | $1,050,000 | $ 950,000 |
| Marketable securities | 301,000 | 420,000 |
| Accounts receivable (net) | 585,000 | 500,000 |
| Inventories | 420,000 | 380,000 |
| Prepaid expenses | 108,000 | 20,000 |
| Total current assets | $ 2,464,000 | $2,270,000 |
| Long-term investments | 800,000 | 800,000 |
| Property, plant, and equipment (net) | 5,760,000 | 5,184,000 |
| Total assets | $ 9,024,000 | $8,254,000 |
| Liabilities | ||
| Current liabilities | $ 880,000 | $ 800,000 |
| Long-term liabilities: | ||
| Mortgage note payable, 6% | $ 200,000 | $ 0 |
| Bonds payable, 4% | 3,000,000 | 3,000,000 |
| Total long-term liabilities | $ 3,200,000 | $3,000,000 |
| Total liabilities | $ 4,080,000 | $3,800,000 |
| Stockholders’ Equity | ||
| Preferred 4% stock, $5 par | $ 250,000 | $ 250,000 |
| Common stock, $5 par | 500,000 | 500,000 |
| Retained earnings | 4,194,000 | 3,704,000 |
| Total stockholders’ equity | $ 4,944,000 | $4,454,000 |
| Total liabilities and stockholders’ equity | $ 9,024,000 | $8,254,000 |
Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent.
| 1. Working Capital | $ | |
| 2. Current ratio | ||
| 3. Quick ratio | ||
| 4. Accounts receivable turnover | ||
| 5. Number of days’ sales in receivables | ||
| 6. Inventory turnover | ||
| 7. Number of days’ sales in inventory | ||
| 8. Ratio of fixed assets to long-term liabilities | ||
| 9. Ratio of liabilities to stockholders’ equity | ||
| 10. Times interest earned | ||
| 11. Asset turnover | ||
| 12. Return on total assets | % | |
| 13. Return on stockholders’ equity | % | |
| 14. Return on common stockholders’ equity | % | |
| 15. Earnings per share on common stock | $ | |
| 16. Price-earnings ratio | ||
| 17. Dividends per share of common stock | $ | |
| 18. Dividend yield |
