P3-3 Alleg, Inc P3-8 Corvallis Corporation P4-1 Decher Automotives P4-4 Taperline Corporation Answer
P3-3 Alleg, Inc P3-8 Corvallis Corporation P4-1 Decher Automotives P4-4 Taperline Corporation Answer
P3-3 Alleg, Inc P3-8 Corvallis Corporation P4-1 Decher Automotives P4-4 Taperline Corporation AnswerP3-3
Classified Balance Sheets (60 points)
The following (given in scrambled order) are accounts and balances from the accounting records of Alleg, Inc., as of December 31, 2012, after the books were closed for the year.
Common stock, authorized 21,000 share
At $1 par value, issued 12,000 shares $12,000
Additional paid-in capital 38,000
Cash 14,000
Marketable securities 17,000
Accounts receivable 26,000
Accounts Payable 16,000
Current maturities of long-term debt 11,000
Mortgages payable 80,000
Bonds payable 65,000
Inventory 33,000
Land and buildings 57,000
Machinery and equipment 120,000
Goodwill 13,000
Patents 9,000
Other assets 45,000
Deferred income taxes (long-term liability) 18,000
Retained earnings 33,000
Accumulated depreciation 61,000
Bonds and mortgages generally have 10-30 years until maturity. Marketable securities are short-term investments that can be converted to cash in a matter of minutes.
Required:
1.Prepare a classified balance sheet with a proper heading on a spreadsheet. For assets, use the classifications of current assets, plant and equipment, intangibles, and other assets. For liabilities, use the classifications of current liabilities and long-term liabilities.
2.Compute the total asset turnover rate assuming that total revenues in 2012 were $682,500. Round to the nearest hundredth, e.g. 3.33.
3.Assume that Alleg’s primary competitor has an asset turnover of 2.12. What does this tell you about Alleg’s asset management?P3-8
Little Harrisburg, Inc.
Corvallis Corporation owns 80% of the stock of Little Harrisburg, Inc. At December 31, 2000, Little Harrisburg had the following summarized balance sheet:
LITTLE HARRISBURG,Balance Sheet
December 31, 2000
Current assets
$100,000
Current liabilities
$ 50,000
Property, plant, and
Long-term debt
150,000
equipment (net)
400,000
Capital stock
50,000
Retained earnings
250,000
$500,000
$500,000
The earnings of Little Harrisburg, Inc. for 2000 were $50,000 after tax.
Required
a. What would be the amount of minority interest on the balance sheet of Corvallis Corporation? How should minority interest be classified for financial statement analysis purposes?
b. What would be the minority share of earnings on the income statement of Corvallis Corporation?P4-1
The following information for Decher Automotives covers the year
The following information for Decher Automotives covers the year ended 2010:
Administrative expense ……………………………….$ 62,000
Dividend income ……………………………………… 10,000
Income taxes ………………………………………….. 100,000
Interest expense ………………………………………. 20,000
Merchandise inventory, 1/1 …………………………… 650,000
Merchandise inventory, 12/31 …………………………. 440,000
Flood loss (net of tax) ………………………………….. 30,000
Purchases ……………………………………………….. 460,000
Sales ……………………………………………………. 1,000,000
Selling expenses ………………………………………… 43,000Required
a. Prepare a multiple-step income statement.
b. Assuming that 100,000 shares of common stock are outstanding, calculate the earnings per share before extraordinary items and the net earnings per share.
c. Prepare a single-step income statement.P4-4
The following items are from Taperline Corporation on December 3
The following items are from Taperline Corporation on December 31, 2010. Assume a flat 40% corporate tax rate on all items, including the casualty loss.
Sales …………………………………………….$670,000
Rental income ………………………………….. 3,600
Gain on the sale of fixed assets ………………… 3,000
General and administrative expenses …………… 110,000
Selling expenses ………………………………… 97,000
Interest expense …………………………………. 1,900
Depreciation for the period ……………………… 10,000
Extraordinary item (casualty loss—pretax) ……… 30,000
Cost of sales ……………………………………… 300,000
Common stock (30,000 shares outstanding) ……… 150,000Required
a. Prepare a single-step income statement for the year ended December 31, 2010. Include earnings per share for earnings before extraordinary items and net income.
b. Prepare a multiple-step income statement. Include earnings per share for earnings before extraordinary items and net income.
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