.494px;=”” block;=”” baseline;=”” 14px;=”” sans-serif;=”” arial,=”” helvetica,=”” neue”,=”” “helvetica=”” web”,=”” grot=”” “haas=”” inherit;=”” 6px;=”” 0px=”” border-box;=””>Question 1 1 Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended December 31, 2015
Philadelphia Widget Corporation
Income Statement
For the year ended December 31, 2015
Revenue $1,235,000 Cost of Goods Sold 806,356 Gross Profit $428,644 Administrative
Expenses:
Salaries
Rent
Depreciation
Total Administrative
Expense
Operating Profit Gain on Sale of
Equipment
Interest Expense
Net Income Cash
Accounts Receivable $212,450
82,500
24,800 319,750 $108,894 4,500 -42,115
$71,279 Philadelphia Widget Corporation
Comparative Balance Sheets
December 31, 2015; 2014; and 2013
2015
2014
$119,411
$89,564
85,455 83,118 2013
$105,644
78,400 Inventory 41,600 48,560 62,600 Prepaid Expenses 14,500 18,100 24,000 260,966 239,342 270,644 50,000 50,000 50,000 Total Current Assets Land
Buildings & Equipment $182,450 Accumulated
Depreciation 78,900 Total Assets $172,450 103,550 62,600 $166,800 109,850 54,580 112,220 $414,516 $399,192 $432,864 $62,525 $51,480 $45,200 Wages Payable 4,500 4,500 1,500 Unearned Revenue 3,000 – – Current Portion of
Long-Term Debt 50,000 50,000 50,000 Total Current Liabilities 120,025 105,980 96,700 Long-Term Debt 175,000 225,000 275,000 Accounts Payable Common Stock, 3,500
shares outstanding Retained Earnings $35,000 $35,000 $35,000 84,491 33,212 26,164 Total Stockholders’
Equity Total Liabilities &
Equity 119,491 68,212 61,164 $414,516 $399,192 $432,864 Instructions Prepare a Statement of Cash Flow using the indirect method for the 2015, using the above statements and the following ad 1. Equipment costing $30,000 was purchased in 2015.
2. Equipment having an original cost of $20,000 and accumulated depreciation of $8,500 was sold for $16,000 during 20
3. A dividend of $20,000 was declared and paid in 2015. nded December 31, 2015. They have completed the balance sheet and income statement as shown. ments and the following additional information: sold for $16,000 during 2015. Instructions
Prepare a vertical analysis for the most recent year for Philadelphia Widget Corporation’ income statement. Philadelphia Widget Corporation
Vertical Analysis of Income Statement
Revenue $1,235,000 ##.#% 806,356 ##.#% $428,644 ##.#% 212,450
82,500 ##.#%
##.#% 24,800 ##.#% Total
Administr
ative
Expense 319,750 ##.#% Operating
Profit $108,894 ##.#% Gain on
Sale of
Equipmen
t 4,500 ##.#% -42,115 ##.#% $71,279 ##.#% Cost of
Goods
Sold
Gross
Profit Administr
ative
Expenses:
Salaries
Rent
Depreciati
on Interest
Expense
Net
Income me statement. Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended December 31, 2015
Philadelphia Widget Corporation
Income Statement
For the year ended December 31, 2015
Revenue $1,235,000 Cost of Goods Sold 806,356 Gross Profit $428,644 Administrative
Expenses:
Salaries
Rent
Depreciation
Total Administrative
Expense
Operating Profit Gain on Sale of
Equipment
Interest Expense
Net Income Cash $212,450
82,500
24,800 319,750 $108,894 4,500 -42,115
$71,279 Philadelphia Widget Corporation
Comparative Balance Sheets
December 31, 2015; 2014; and 2013
2015
2014
$119,411
$89,564 2013
$105,644 Accounts Receivable 85,455 83,118 78,400 Inventory 41,600 48,560 62,600 Prepaid Expenses
Total Current Assets Land
Buildings & Equipment Accumulated
Depreciation 14,500 18,100 24,000 260,966 239,342 270,644 50,000 50,000 50,000 $182,450 78,900 Total Assets $172,450 103,550 62,600 $166,800 109,850 54,580 112,220 $414,516 $399,192 $432,864 $62,525 $51,480 $45,200 Wages Payable 4,500 4,500 1,500 Unearned Revenue 3,000 – – Current Portion of
Long-Term Debt 50,000 50,000 50,000 Total Current Liabilities 120,025 105,980 96,700 Long-Term Debt 175,000 225,000 275,000 Accounts Payable Common Stock, 3,500
shares outstanding Retained Earnings $35,000 $35,000 $35,000 84,491 33,212 26,164 Total Stockholders’
Equity Total Liabilities &
Equity 119,491 68,212 61,164 $414,516 $399,192 $432,864 Instructions
Calculate the following ratios based on 12/31/2015 numbers:
1. Earnings per share
2. Return on common stockholders’ equity
3. Return on assets
4. Current ratio
5. Acid-test ratio
6. Accounts receivable turnover nded December 31, 2015. They have completed the balance sheet and income statement as shown. Prepare a horizontal analysis the two most recent years of Philadelphia Widget Corporation’s balance sheets.
Philadelphia Widget CorporationHorizontal Analysis of Balance Sheet Cash 2015
$119,411 2014
2013
##.#% $89,564
##.#% $105,644 Accounts
Receivable 85,455 ##.#% 83,118 ##.#% 78,400 Inventory 41,600 ##.#% 48,560 ##.#% 62,600 Prepaid
Expenses 14,500 ##.#% 18,100 ##.#% 24,000 Total Current $260,966
Assets ##.#% $239,342 ##.#% $270,644 Land 50,000 ##.#% 50,000 ##.#% 50,000 103,550 ##.#% 109,850 ##.#% 112,220 Buildings &
Equipment,
net Total Assets $414,516 ##.#% $399,192 ##.#% $432,864 Accounts
Payable ##.#% $51,480 ##.#% $45,200 $62,525 Wages
Payable 4,500 ##.#% 4,500 ##.#% 1,500 Unearned
Revenue 3,000 – – – – Current
Portion of
Long-Term
Debt 50,000 ##.#% 50,000 ##.#% 50,000 Total Current $120,025
Liabilities ##.#% $105,980 ##.#% $96,700 Long-Term
Debt 175,000 ##.#% 225,000 ##.#% 275,000 Common
Stock 35,000 ##.#% 35,000 ##.#% 35,000 Retained
Earnings 84,491 ##.#% 33,212 ##.#% 26,164 Total
Liabilities &
Equity $414,516 ##.#% $399,192 ##.#% $432,864 ’s balance sheets.