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Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

1. Biven Corporation’s balance sheet and income statement appear below:
BALANCE SHEETS 2006 2005
ASSETS
Cash & equivalents $35,000 $30,000
Accounta receivable 54,000 49,000
Inventory 67,000 58,000
Plant & equipment 580,000 530,000
Accumulated depreciation (316,000) (313,000)
Total Assets $420,000 $354,000
LIABILITIES & EQUITIES
Accounts payable $51,000 $57,000
Wages payable 26,000 24,000
axes payable 11,000 10,000
Deferred taxes payable 25,000 24,000
Bonds payable (long term) 77,000 90,000
Total liabilities 190,000 205,000
Common stock 33,000 30,000
Retained earnings 197,000 119,000
Total equities 230,000 149,000
Total liabilities & equities $420,000 $354,000

INCOME STATEMENTS 2006 2005
Sales $620,000 $520,000
Cost of goods sold 381,000 300,000
Gross margin 239,000 220,000
Selling & Admin expense 103,000 99,000
Net operating income 136,000 121,000
Gain on sale of plant & equipment 20,000
– Income before tax 156,000 121,000
Income tax 47,000 36,000
Net income $109,000 $85,000
Cash dividends were $31,000.
The company sold equipment for $20,000.
The equipment had originally cost $14,000 and was fully depreciated.
Required: Prepare a statement of cash flows for 2006 using the indirect and direct methods.

2. Biven Corporation’s balance sheet and income statement appear below:
BALANCE SHEETS 2006 2005
ASSETS
Cash & equivalents $35,000 $30,000
Accounta receivable 54,000 49,000
Inventory 67,000 58,000
Plant & equipment 580,000 530,000
Accumulated depreciation (316,000) (313,000)
Total Assets $420,000 $354,000
LIABILITIES & EQUITIES
Accounts payable $51,000 $57,000
Wages payable 26,000 24,000
axes payable 11,000 10,000
Deferred taxes payable 25,000 24,000
Bonds payable (long term) 77,000 90,000
Total liabilities 190,000 205,000
Common stock 33,000 30,000
Retained earnings 197,000 119,000
Total equities 230,000 149,000
Total liabilities & equities $420,000 $354,000

INCOME STATEMENTS 2006 2005
Sales $620,000 $520,000
Cost of goods sold 381,000 300,000
Gross margin 239,000 220,000
Selling & Admin expense 103,000 99,000
Net operating income 136,000 121,000
Gain on sale of plant & equipment 20,000
– Income before tax 156,000 121,000
Income tax 47,000 36,000
Net income $109,000 $85,000
Cash dividends were $31,000.
The company sold equipment for $20,000.
The equipment had originally cost $14,000 and was fully depreciated.

Required: Fill in the Amounts and Percent of change in the balance sheet and income statements.

3. Espinola Corporation’s most recent balance sheet and income statement appear below:

BALANCE SHEETS 2006 2005

ASSETS
Cash & equivalents $320,000 $180,000
Accounta receivable 220,000 240,000
Inventory 140,000 130,000
Prepaid expenses 20,000 20,000
Total current assets 700,000 570,000
Plant & equipment, net 860,000 920,000
Total Assets $1,560,000 $1,490,000
LIABILITIES & EQUITIES
Accounts payable $200,000 $170,000
Accrued payable 80,000 80,000
Notes payable, current 40,000 40,000
Total current liabilities 320,000 290,000
Bonds payable 210,000 220,000
Total liabilities 530,000 510,000
Preferred stock, $100 par value, 5% 100,000 100,000
Common stock, $1
par value 100,000 100,000
Additional paid in capital, common stock 150,000 150,000
Retained earnings 680,000 630,000
Total equities 1,030,000 980,000
Total liabilities & equities $1,560,000 $1,490,000

INCOME STATEMENT 2006
Sales $1,220,000
Cost of goods sold 790,000
Gross margin 430,000
Selling & Admin expense 268,000
Net operating income 162,000
Interest expense 26,000
Income before tax 136,000
Income tax 41,000
Net income 95,000
Dividends paid, preferred 5,000
Net income for common shareholders 90,000
Dividends paid, common 40,000
Net income added to retained earnings 50,000
Beginning retained earnings 630,000
Ending retained earnings $680,000
Other: Market value of stock end of year $12.87
Tax rate 30%
Bond interest 10%
Return demanded on preferred stock 10%
Return demanded on common stock 14%
Required compute the following for 2006 :

a. Gross margin percentage.
b. Earnings per share (of common stock).
c. Price-earnings ratio.
d. Dividend payout ratio.
dividend per share
dividend payout ratio
e. Dividend yield ratio.
f. Return on total assets.
after tax cost of interest
average total assets
return on total assets
g. Return on common stockholders’ equity.
average stockholders equity
average preferred stock
return on equity
h. Book value per share.
i. Working capital.
j. Current ratio.
k. Acid-test ratio.
l. Accounts receivable turnover.
m. Average collection period (days).
n. Inventory turnover.
o. Average sale period (days).
p. Times interest earned.
q. Debt-to-equity ratio.
r. Show that financial leverage is positive or negative.

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