# E14-17 e15-18 p15-26a | Accounting homework help

E14-17 E15-18 P15-26A

E14-17 Minerals Plus, Inc

E15-18 Large Land Photo Shop

P15-26A Danfield, Inc

E14-17 The income statement of Minerals Plus, Inc. follows:

 Minerals Plus, Inc. Income Statement Year Ended September 30,2012 Revenues: Service revenue \$235,000 Expenses: Cost of goods sold \$97,000 Salary expense \$57,000 Depreciation expense \$26,000 Income tax expense \$4,000 \$184,000 Net income \$51,000

a.   Acquisition of plant assets is \$118,000. Of this amount \$100,000 is paid in cash and \$18,000 by signing a note payable.

b.   Cash receipts from sale of land totals \$28,000. There was no gain or loss.

c.   Cash receipts from issuance of common stock total \$29,000.

d.   Payment of note payable is \$18,000.

e.   Payment of dividends is \$8,000.

f.    From the balance sheet:

 Sept. 30 2012 2011 Current Assets: Cash \$30,00 \$8,000 Accounts receivable \$41,000 \$59,000 Inventory \$97,000 \$93,000 Current Liabilities: Accounts payable \$30,000 \$17,000 Accrued liabilities \$11,000 \$24,000

Compute DVD’s net cash provided by (used for) operating activities during July. Use the indirect method.

Financial Statement Analysis

From Chapter 15, complete E15-18 and P15-26A and post the answers to the discussion board by day 3. Respond to at least two of your classmates’ postings.

E15-18 Large Land Photo Shop has asked you to determine whether the company’s ability to pay current liabilities and total liabilities improved or deteriorated during 2012. To answer this question, you gather the following data:

 2012 2011 Cash \$58,000 \$57,000 Short-term investments 31,000 Net receivables 110,000 132,000 Inventory 247,000 297,000 Total assets 585,000 535,000 Total current liabilities 255,000 222,000 Long-term note payable 46,000 48,000 Income from operations 180,000 153,000 Interest expense 52,000 39,000

1.   Compute the following ratios for 2012 and 2011:

a.   Current ratio

b.   Acid-test ratio

c.   Debt to equity ratio

P15-26A Using ratios to evaluate a stock investment

Comparative financial statement data of Danfield, Inc., follow:

 Danfield, Inc. Comparative Income Statement Years Ended December 31, 2012 and 2011 2012 2011 Net sales \$467,000 \$428,000 Cost of goods sold 237,000 218,000 Gross profit \$230,000 \$210,000 Operating expenses 136,000 134,000 Income from operations \$94,000 \$76,000 Interest expense 9,000 10,000 Income before income tax \$85,000 \$66,000 Income tax expense 24,000 27,000 Net income \$61,000 \$39,000

 Danfield, Inc. Comparative Income Statement Years Ended December 31, 2012 and 2011 2012 2011 2010* Current assets: Cash \$97,000 \$95,000 Current receivables, net 112,000 118,000 \$102,000 Inventories 145,000 163,000 203,000 Prepaid expenses 12,000 5,000 Total current assets \$366,000 \$381,000 Property, plant, and equipment, net 211,000 179,000 Total assets 577,000 \$560,000 598,000 Total current liabilities \$225,000 \$246,000 Long-term liabilities 114,000 97,000 Total liabilities \$339,000 \$343,000 Preferred stock, 3% 108,000 108,000 Common stockholders’ equity, no par 130,000 109,000 Total liabilities and stockholders’ equity \$577,000 \$560,000

* Selected 2010 amounts

1. Market price of Danfield’s common stock: \$86.58 at December 31, 2012 and \$46.54 at December 31, 2011.

2. Common shares outstanding: 12,000 during 2012 and 10,000 during 2011 and 2010.

3. All sales on credit.

Requirements

1.   Compute the following ratios for 2012 and 2011:

a.   Current ratio

b.   Times-interest-earned ratio

c.   Inventory turnover

d.   Gross profit percentage

e.   Debt to equity ratio

f.    Rate of return on common stockholders’ equity

g.   Earnings per share of common stock

h.   Price/earnings ratio

2.   Decide (a) whether Danfield’s ability to pay debts and sell inventory improved or deteriorated during 2012 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.

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