Johnson Corporation manufactures food processing equipment. Use Johnson Corporation's two most recent balance sheets and most recent
Question:
Johnson Corporation manufactures food processing equipment. Use Johnson Corporation's two most recent balance sheets and most recent income statement to view a statement of cash flows for 2010. The company paid dividends of $6,250 during 2010.
Johnson Corporation
Balance Sheet
As of December 31,
2010
2009
Assets:
Cash and cash equivalents
$41,900
$25,000
Accounts Receivable
24,000
6,250
Inventory
30,000
36,000
Current Assets
95,900
67,250
Equipment
42,000
38,500
Less: Accumulated depreciation
-14,000
-7,000
Land
25,000
10,000
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 note 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 and stockholders' equity
$148,900
$108,750
Johnson Corporation
Income Statement
For the year ended December 31, 2010
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 Operating Expenses
-38,300
Income from Operations
24,700
Income Tax Expense
-6,900
Net income
$17,800
II.Using this analytical framework below indicate the effect of each of the following transactions for CX Corporation:
1.
CX Corporation purchases land for $450,000 cash.
2.
At the end of the period CX Corporation receives an appraisal that values the land at $540,000.
3.
During the next period CX Corporation sells the land for $665,000.
4.
CX pays taxes at a rate of 40%.
CASH
NON-CASH ASSETS
=
LIABILITIES
CONTRIBUTED CAPITAL
AOCI
RETAINED EARNINGS
III. The following balance sheet and income statement pertain to Enron Corp., using the following assumptions view a forecasted 2013 income statement:
Assumptions for 2013:
Revenue growth rate
45%
COGS
70% of sales
Operating expenses
18% of sales
Interest expense
12% of beginning long-term debt
Tax rate
35%
Enron Corp. Consolidated Statement of Income
(Thousands except per share amounts)
2012
Net Revenues
$345,871
Cost of Revenue
(226,546)
SG&A
(83,009)
Operating Income
36,316
Interest Expense
(484)
Income Before Income Taxes
35,832
Income taxes
(12,541)
Net Income
$23,291
Enron Corp Consolidated Balance Sheet
(Thousands)
2012
Current Assets
Cash and Equivalents
7,905
Merchandise inventory
6,308
Accounts receivable
6,614
PPE (including intangibles), net
39,458
Total Assets
60,285
Liabilities and Stockholders' Equity
Accounts payable
9,643
Long-term debt
13,500
Shareholders' Equity
Common stock and APIC
28,613
Retained earnings
8,529
Total Liabilities and Shareholders' Eq.
60,285
IV.Arco Company
These data represent a summary of your first-iteration forecast amounts for Year 1. Arco uses dividends as a flexible financial account.
Year + 1
Operating Income
$ 58
Interest Expense
8
Income before Tax
$ 50
Tax Provision (20.0 percent effective tax rate)
10
Net Income
$ 40
Total Assets
$200
Accrued Liabilities
$ 43
Long-Term Debt
$ 80
Common Stock, at par
$ 20
Retained Earnings (at the beginning of Year 1)
$ 34
See the information for Arco Company.
Compute the amount of dividends you can assume that Arco will pay in order to balance your projected balance sheet. Present the projected balance sheet.
Expert Answer:
To compute the amount of dividends that can be assumed for Arco Company in order to balance the projected balance sheet we need to start with the given information and make some assumptions Given Info... View the full answer
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
