ACC 310F Study Guide - Midterm Guide: Wyco, West Virginia, Accounts Payable, Retained Earnings
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Consider the following balance sheet:
BestCare HMO
Balance Sheet
June 30, 2011
(in thousands)
Assets
Current Assets:
Cash $2,737
Net premiums receivable 821
Supplies 387
Total current assets $3,945
Net property and equipment $5,924
Total assets $9,869
Liabilities and Net Assets
Accounts payableâmedical
Services $2,145
Accrued expenses 929
Notes payable 382
Total current liabilities $3,456
Long-term debt $4,295
Total liabilities $7,751
Net assetsâunrestricted
(equity) $2,118
Total liabilities and net
Assets $9,869
Consider the following financial statements for Green Valley Nursing Home, Inc. a for profit long-term care facility:
Green Valley Nursing Home Inc.
Balance Sheet
December 31, 2011
Assets
Current assets:
Cash $105,737
Marketable securities 200,000
Net patient accounts receivables 215,600
Supplies 87,655
Total current assets $608,992
Property and equipment $2,250,000
Less accumulated depreciation 356,000
Net property and equipment $1,894,000
Total assets $2,502,992
Liabilities and Shareholder?s Equity
Current liabilities:
Accounts payable $72,250
Accrued expenses 192,900
Notes payable 100,000
Current portion of long-term debt 80,000
Total current liabilities $445,150
Long term debt $1,700,000
Shareholders? Equity:
Common stock, $10 par value $100,000
Retained earnings 257,842
Total shareholder?s equity $357,842
Total liabilities and shareholders? equity $2,502,992
A. WHAT IS THE PRIMARY DIFFERENCE BETWEEN THESE 2 STATEMENTS
c. What was Green Valley's total debt ratio?************************************* | |
Current liabilities | |
LT liabilities | |
Total liabilities (debt) | |
Total assets | |
Total debt ratio |
Devin E Corporation | |||
Balance Sheet | |||
As of December 31, | |||
2015 | 2014 | ||
Assets: | |||
Cash & Cash Equivalents | $41,900 | $25,000 | |
Accounts Receivable | 24,000 | 6,250 | |
Inventory | 30,000 | 36,000 | |
CurrentAssets | 95,900 | 67,250 | |
Land | 25,000 | 10,000 | |
Equipment | 42,000 | 38,500 | |
Less: Accumulated Depreciation | (14,000) | (7,000) | |
53,000 | 41,500 | ||
Total Assets | 148,900 | 108,750 | |
Liabilities: | |||
Accounts Payable | 17,500 | 22,500 | |
Accrued Salaries Payable | 5,500 | 8,000 | |
Rent Expense Payable | 2,200 | 1,000 | |
Income Tax Payable | 6,900 | 4,000 | |
Current Liabilities | 32,100 | 35,500 | |
Long-term notes payable | 50,000 | 30,000 | |
Total Liabilities | 82,100 | 65,500 | |
Stockholders Equity: | |||
Common Stock | 42,000 | 30,000 | |
Retained Earnings | 24,800 | 13,250 | |
Total Liabilities & StockholdersEquity | $148,900 | $108,750 | |
Devin E Corporation | |||
Income Statement | |||
For the Year Ended December 31, 2015 | |||
2015 | |||
Revenues | $147,000 | ||
Cost of Goods Sold | 84,000 | ||
Gross Profit | 63,000 | ||
Operating Expenses | |||
Depreciation Expense | 7,000 | ||
Salary Expense | 14,600 | ||
Insurance Expense | 2,500 | ||
Rent Expense | 10,000 | ||
Interest Expense | 4,200 | ||
Total OperatingExpenses | 38,300 | ||
Income from Operations | 24,700 | ||
Income Tax Expense | 6,900 | ||
Net Income | $17,800 | ||
Devin E Corporation (theâCompanyâ) manufactures food processing equipment. Use DevinCorporationâs 2015 and 2014 balance sheets and 2015 incomestatement shown below to prepare a statement of cash flows for2015. Note that the Company paid dividends of $6,250 during2015. |
Please fill in the balance sheet as well as create a statementof cash flow sheet
Devin E Corporation | ||||||||
Balance Sheet | ||||||||
31-Dec | ||||||||
Worksheet for Cash Flow | ||||||||
2015 | 2014 | Change | Cash | Operating | Investing | Financing | ||
Cash and Cash Equivalents | ||||||||
Accounts Receivable | ||||||||
Inventory | ||||||||
Land | ||||||||
Equipment | ||||||||
Accumulated Depreciation | ||||||||
Accounts Payable | ||||||||
Accrued Salaries Payable | ||||||||
Rent Expense Payable | ||||||||
Income Tax Payable | ||||||||
Long-term Note Payable | ||||||||
Common Stock | ||||||||
Retained Earnings | ||||||||
Devin E Corporation | ||
Statement of Cash Flows | ||
For the Year Ended December 31, 2015 | ||
Financial Information for Case9-1 | |||
Industy Wide | |||
Balance Sheets | |||
Years Ended December 31, 2014and 2015 | |||
2015 | 2014 | ||
Assets | |||
Current Assets: | |||
Cash | $ 30,000 | $ 25,000 | |
Accounts receivable | 110,000 | 90,000 | |
Inventories | 100,000 | 80,000 | |
Total Current Assets | 240,000 | 195,000 | |
Fixed Assets; | |||
Plant and equipment | 250,000 | 220,000 | |
Less accumulated depreciation | (100,000) | (65,000) | |
Land | 50,000 | 50,000 | |
Total Fixed Assets | 200,000 | 205,000 | |
Total Assets | $ 440,000 | $ 400,000 | |
Liabilities and Equity | |||
Current Liabilities: | |||
Accounts payable | $ 58,000 | $ 50,000 | |
Notes payable-due within one year | 50,000 | 50,000 | |
Accrued liabilities | - | - | |
Total Current Liabilities | 108,000 | 100,000 | |
Long Term Liabilities | 32,000 | 20,000 | |
Total Liabilities | 140,000 | 120,000 | |
Stockholders' Equity: | |||
Common stock | 100,000 | 100,000 | |
Retained earnings | 200,000 | 180,000 | |
Total Stockholders' Equity | 300,000 | 280,000 | |
Total Liabilities and Equty | $ 440,000 | $ 400,000 | |
Industry Wide | |||
Income Statement | |||
Years Ended December 31, 2014and 2015 | |||
Revenues | $ 1,100,000 | $ 1,000,000 | |
Cost of goods sold | (700,000) | (650,000) | |
Gross margin | 400,000 | 350,000 | |
Operating expenses | (275,000) | (255,000) | |
Operating income | 125,000 | 95,000 | |
Interest expense | (15,000) | (15,000) | |
Income before taxes | 110,000 | 80,000 | |
Income taxes | (44,000) | (32,000) | |
Net income | $ 66,000 | $ 48,000 | |
Financial Information for Case9-1 | |||
Industy Wide | |||
Balance Sheets | |||
Years Ended December 31, 2014and 2015 | |||
2015 | 2014 | ||
Assets | |||
Current Assets: | |||
Cash | $ 30,000 | $ 25,000 | |
Accounts receivable | 110,000 | 90,000 | |
Inventories | 100,000 | 80,000 | |
Total Current Assets | 240,000 | 195,000 | |
Fixed Assets; | |||
Plant and equipment | 250,000 | 220,000 | |
Less accumulated depreciation | (100,000) | (65,000) | |
Land | 50,000 | 50,000 | |
Total Fixed Assets | 200,000 | 205,000 | |
Total Assets | $ 440,000 | $ 400,000 | |
Liabilities and Equity | |||
Current Liabilities: | |||
Accounts payable | $ 58,000 | $ 50,000 | |
Notes payable-due within one year | 50,000 | 50,000 | |
Accrued liabilities | - | - | |
Total Current Liabilities | 108,000 | 100,000 | |
Long Term Liabilities | 32,000 | 20,000 | |
Total Liabilities | 140,000 | 120,000 | |
Stockholders' Equity: | |||
Common stock | 100,000 | 100,000 | |
Retained earnings | 200,000 | 180,000 | |
Total Stockholders' Equity | 300,000 | 280,000 | |
Total Liabilities and Equty | $ 440,000 | $ 400,000 | |
Industry Wide | |||
Income Statement | |||
Years Ended December 31, 2014and 2015 | |||
Revenues | $ 1,100,000 | $ 1,000,000 | |
Cost of goods sold | (700,000) | (650,000) | |
Gross margin | 400,000 | 350,000 | |
Operating expenses | (275,000) | (255,000) | |
Operating income | 125,000 | 95,000 | |
Interest expense | (15,000) | (15,000) | |
Income before taxes | 110,000 | 80,000 | |
Income taxes | (44,000) | (32,000) | |
Net income | $ 66,000 | $ 48,000 |
1. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for 2014 and 2015 for the JordanCorporation.
2. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for the Industry.
3. Compare the performance of the Jordan Corporation between2014 and 2015 and comment on the trend of each ratio.
4. Compare the performance of the Jordan Corporation in 2015 tothe industry averages and comment on each.