Assume that the percentage changes experienced in fiscal year 2015 as compared with fiscal year 2014 for
Fantastic news! We've Found the answer you've been seeking!
Question:
Assume that the percentage changes experienced in fiscal year 2015 as compared with fiscal year 2014 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburn's desire to finance the plant expansion from internally generated funds realistic? Discuss.
Transcribed Image Text:
P24-3 (Ratio Computations and Additional Analysis) Bradbum Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2014 Daniel Brown approached th Topeka National Bank, asking for a 24-month extension on two June 30, 2015, and September 30, 2015. Another note of expects no difficulty in paying this note on its due date. Brown explained that Bradburn's cash flow problems are due primarily to the company's desire to finance a 2 fiscal years through internally generated funds. 15% Jof $35,000 is due on March 31, 2016, but he notes, which are due $6.000 $300,000 plant expansion over the next The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years. BRADBURN CORPORATION Statement of Financial Position March 31 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) Total assets 2015 $18,200 148,000 131,800 105,000 1,449,000 $1.852,000 2014 $12,500 132,000 125,500 50,000 1,420,500 $1.740,500 Liabilities and Stockholders' Equity Accounts payable Notes payable Accrued liabilities Common stock (130,000 shares, $10 par) Retained earnings" Total liabilities and stockholders' equity *Cash dividends were paid at the rate of $1 per share in fiscal year 2014 and $2 per share in fiscal year 2015. $79.000 76,000 9.000 1,300,000 388,000 $1,852.000 $91.000 61,500 6,000 1,300,000 282,000 $1,740,500 BRADBURN CORPORATION Income Statement For The Fiscal Year Ended March 31 2015 2014 Sales Cost of goods sold Gross margin Operating expenses Income before income taxes Income taxes Net income after income taxes Depreciation charges on the plant and equipment of for the fiscal years ended March 31, 2014, and 2015, respectively, are included in cost of goods sold. $3,000,000 1,530,000 1,470,000 860,000 610,000 244,000 $366,000 $2,700,000 1,425,000 1,275,000 780,000 495,000 198,000 $297,000 $102,500 $100,000 and P24-3 (Ratio Computations and Additional Analysis) Bradbum Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2014 Daniel Brown approached th Topeka National Bank, asking for a 24-month extension on two June 30, 2015, and September 30, 2015. Another note of expects no difficulty in paying this note on its due date. Brown explained that Bradburn's cash flow problems are due primarily to the company's desire to finance a 2 fiscal years through internally generated funds. 15% Jof $35,000 is due on March 31, 2016, but he notes, which are due $6.000 $300,000 plant expansion over the next The commercial loan officer of Topeka National Bank requested financial reports for the last 2 fiscal years. BRADBURN CORPORATION Statement of Financial Position March 31 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) Total assets 2015 $18,200 148,000 131,800 105,000 1,449,000 $1.852,000 2014 $12,500 132,000 125,500 50,000 1,420,500 $1.740,500 Liabilities and Stockholders' Equity Accounts payable Notes payable Accrued liabilities Common stock (130,000 shares, $10 par) Retained earnings" Total liabilities and stockholders' equity *Cash dividends were paid at the rate of $1 per share in fiscal year 2014 and $2 per share in fiscal year 2015. $79.000 76,000 9.000 1,300,000 388,000 $1,852.000 $91.000 61,500 6,000 1,300,000 282,000 $1,740,500 BRADBURN CORPORATION Income Statement For The Fiscal Year Ended March 31 2015 2014 Sales Cost of goods sold Gross margin Operating expenses Income before income taxes Income taxes Net income after income taxes Depreciation charges on the plant and equipment of for the fiscal years ended March 31, 2014, and 2015, respectively, are included in cost of goods sold. $3,000,000 1,530,000 1,470,000 860,000 610,000 244,000 $366,000 $2,700,000 1,425,000 1,275,000 780,000 495,000 198,000 $297,000 $102,500 $100,000 and
Expert Answer:
Answer rating: 100% (QA)
2015 2016 2017 Sales 3000000 3333300 3703630 COGS 1530000 1642761 1763832 Gross Margin 1470000 16905... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Posted Date:
Students also viewed these accounting questions
-
The Tree Corporation sold 200,000 units at a price of $5. Each unit cost $1.8 or 36% of sales to produce. The fixed costs are $75,000. Depreciation is $125,000. Interest expense is 12% of long-term...
-
Sales are $500,000 and cost of goods sold is $320,000. Beginning and ending inventories are $28,000 and $38,000, respectively. How many times did the company turn its inventory over during this...
-
Sales for 2017 were $245,000, and the cost of goods sold was 60 percent of sales Selling and administrative expense was $24,500 Depreciation expense was 8 percent of plant and equipment (gross) at...
-
Consider the integral where n is an integer. Using the trigonometric identity 1 + tan 2 x = sec 2 x, show that and hence obtain the recurrence relation Use this to find (Recurrence relations of this...
-
Show that the eigenvalues for the (m 1) by (m 1) tridiagonal method matrix A given by are with corresponding eigenvectors v(i), where v(i)j = sin(ijÏ/m). jsi-lorj = 1+1, 1-21, j-i, 0, oterwise...
-
3. Suppose the country of Macroland's annual fiscal standing for six recent years. Assume that interest payments on the debt are covered by government expenditures and that budget surpluses are used...
-
Notes to the financial statements present information on significant accounting policies, complex or special transactions, details of reported amounts, commitments, contingencies, segments, quarterly...
-
Internal rate of return (LO 4) Harrison Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $88,235 and will save...
-
You are a manager at a local accounting firm, and Kate and Sam Smith are your clients. It is the end of the year, and they have come to ask your advice on some tax planning strategies, as well as...
-
Alex Vera organized Succulent Express at the beginning of February 20Y4. During February, Succulent Express entered into the following transactions: a. Terry Mason invested $30,000 in Succulent...
-
Ben's Industry has issued bonds which will mature in 12 years. The bonds have a face value of $1,000, and a coupon rate of 7.96%, payable semi-annually. The price of the bonds is $1,125. The bonds...
-
F Co's balance sheet on January 1, 2015 had total liabilities of $125,000 and total equity of $585,000. On January 20, 2015 the company raised additional capital by selling 100,000 shares of $2 par...
-
Create journal entries for the following ABC Corp. Balance Sheet A s of December 31, 200 6 Assets Liability Cash $6,000 Accounts Payable $3,000 Accounts Receivable $4,000 Stockholders' Equity Common...
-
You have two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -161,000 -111,000 1 29,800 59,700 2 50,100 45,100 3 70,100 29,700 4 90,000 19,900 Irrespective of the project, the...
-
You will invest $ 2 0 0 per year. If the rate is 9 . 0 8 % , how much will you have in 1 8 years?
-
Inventory information for Cut Above, Inc. is provided below. Sales for the period were 2,000 units at $10 each. The company uses FIFO. Date Number of Units Unit Cost Jan. 1 Beginning inventory 1000...
-
PRACTICAL REAL ESTATE LAW Practice Assignment 1 Hodges Development Co., Inc., a South Carolina corporation, is purchasing land from Mills Brothers Associates, a South Carolina general partnership,...
-
Find the market equilibrium point for the following demand and supply functions. Demand: 2p = - q + 56 Supply: 3p - q = 34
-
Journalize the entries to record the following: a. Check No 6500 is issued to establish a petty cash fund of $1,200. b. The amount of cash in the petty cash fund is now $200. Check No. 6527 is issued...
-
What particular item of financial or operating data appears on both the income statement and the retained earnings statement? What item appears on both balance sheet and the retained earnings...
-
The balance in the equipment account is $750,000, and the balance in the accumulated depreciation-equipment account is $425,000. a. What is the book value of the equipment? b. Does the balance in the...
-
Identify all statements that are consistent with the concept of present value. (More than one answer may be correct.) a. The present value of a future amount always is less than that future amount....
-
Silverado maintains a fully funded pension plan. During \(2009, \$ 1\) million was paid to retired workers, and workers currently employed by the company earned a portion of the right to receive...
-
Deferred income taxes result from: a. The fact that bond interest is deductible in the computation of taxable income. b. Depositing income taxes due in future years in a special fund managed by an...
Study smarter with the SolutionInn App