SOLUTION BY CHARTERED ACCOUNTANT | Academic Papers Help

SOLUTION BY CHARTERED ACCOUNTANT

The comparative condensed balance sheets of Garcia Corporation are
presented
below.

Garcia Corporation
Comparative Condensed
Balance Sheets
31-Dec
2014     2013
Assets
Current assets             76,000      80,000
Property, plant & equipment (net)       100,000      90,000
Intangibles             24,000      40,000
Total assets             200,000      210,000
Liabilities and Stockholders’ equity
Current liabilities       40,000      48,000
Long-term liabilities             140,000      150,000
Stockholders’ equity       20,000      12,000
Total liabilities and stockholders’ equity       200,000      210,000

Instructions
(a) Prepare a
horizontal analysis of the balance sheet data for Garcia Corporation
using
2013 as a base.
(b) Prepare a vertical analysis of the balance sheet
data for Garcia Corporation in columnar
form for 2014

The comparative condensed income statements of Hendi Corporation are shown below.

HENDI CORPORATION
Comparative Condensed Income Statements

For the Years Ended December 31
2009           2008
Net sales     $600,000           $500,000
Cost of goods sold

468,000

400,000
Gross profit     132,000           100,000
Operating expenses

60,000

54,000
Net income

$ 72,000

$ 46,000

Maulder Corporation has income from continuing operations of $290,000 for the
year
ended December 31, 2014. It also has the following items (before
considering income taxes).

1. An extraordinary loss of $70,000.
2. A
gain of $35,000 on the discontinuance of a division.
3. A correction of an error in last year’s fi nancial statements that resulted in a $25,000
understatement of 2013 net income.
Assume all items are subject to
income taxes at a 30% tax rate.

Instructions
(a) Prepare an income
statement, beginning with income from continuing operations.
(b) Indicate the
statement presentation of any item not included in (a) above.The comparative statements of Beulah Company are presented below.
Beulah
Company
Income Statement
For the Years Ended December 31

AIDitional
data:
The common stock recently sold at $19.50 per
share.

Instructions
Compute the following ratios for 2014.
(a)
Current. (h) Return on common stockholders’ equity.
(b) Acid-test. (i)
Earnings per share.
(c) Receivables turnover. (j) Price-earnings.
(d)
Inventory turnover. (k) Payout.
(e) Profi t margin. (l) Debt to total
assets.
(f) Asset turnover. (m) Times interest earned.
(g) Return on
assets.