WEEK 2 HOMEWORK ASSIGNMENT- 240
Homework Assignment: P3-5; P3-13; P3-15; P3-16(a), P4-3 (a & b only); P4-5; P4-7 and P4-12. please show work
Problem 3-5
Part a. Earnings per share
Net profit before taxes
Less: Taxes at 40%
Net profit after taxes
Less: Preferred dividends
Earnings available to common stockholders
Earnings per share =
Part b. Amount to retained earnings:
Earnings available to common stockholders
Less: Common stock dividend
Amount to retained earnings
Problem 3-13
Item					2012	2013	2014	2015
Total current assets					16,950	21,900	22,500	27,000
Total current liabilities					9,000	12,600	12,600	17,400
Inventory					6,000	6,900	6,900	7,200
Part a.
Ratio					2012	2013	2014	2015
Current Ratio
Quick Ratio
Part b.
Part c.
Problem 3-15
Average Quarterly Inventory:
1st quarter
2nd quarter
3rd quarter
4th quarter
Total
Divide by 4 =
Inventory Turnover:				(Cost of goods sold is 60% of sales)
Cost of Goods Sold
Average Inventory
Inventory Turnover:						times
Average Age of Inventory:
Days in Year
Inventory Turnover
Average Age in Inventory:							days
Part b.
Problem P3-16
Part a. Average Collection Period
Accounts Receivable
Average Sales per Day
Average collection period =							days
Problem P4-3:
Part a.
Cost of grinder
Depreciation %
Depreciation
Part b.
Pre-tax income
Less: Depreciation
Net taxable income
Original tax liability on $430,000 =
Net tax liability on $414,000 =
Tax savings =
Problem P4-5:
Item			Change	I/O	Item	Change	I/O
Cash			100		Accts. Rec.	-700
Accounts payable			-1000		Net profits	600
Notes payable			500		Depreciation	100
Long-term debt			-2000		Repurchase stk	600
Inventory			200		Cash dividends	800
Fixed assets			400		Sale of stock	1000
Problem 4-7:
				April	May	June	July	August
Sales				$65,000	$60,000	$70,000	$100,000	$100,000
Cash sales (50%)
Collections:
1 month ago (25%)
2 months ago (25%)
Total Cash Receipts
Problem P4-12
						Pro Forma	Pro Forma
					Cash	Income	Balance
Transaction					Budget	Statement	Sheet
Cash sale
Credit sale
Accounts receivable collected
Asset, 5-year life, purchased
Depreciation is taken
Amortization of goodwill taken
Sale of Common Stock
Retirement of outstanding bonds
Fire insurance paid for 3 years