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Ch. 13 & 14 of Financial Accounting

Complete E13-9 (note — this is Exercise 13-9, p. 657 in your text) and

                  P14-3 (note — this is Problem 14-3 – p. 717 in your text).

Submit as a Microsoft® Excel or Word® document (Excel is preferred)

 

here is the copy and pasted text problems;

prepare a statement of cash flows for 2011 using the indirect method

E13-9 Muldur Corporation’s comparative balance sheets are presented below.
EDDIE MURPHY COMPANY
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $ 63,000 $ 22,000
Accounts receivable 85,000 76,000
Inventories 180,000 189,000
Land 75,000 100,000
Equipment 260,000 200,000
Accumulated depreciation (66,000) (42,000)
Total $597,000 $545,000
Liabilities and Stockholders’ Equity
Accounts payable $ 34,000 $ 47,000
Bonds payable 150,000 200,000
Common stock ($1 par) 214,000 164,000
Retained earnings 199,000 134,000
Total $597,000 $545,000
MULDUR CORPORATION
Comparative Balance Sheets
December 31
2011 2010
Cash $ 15,200 $ 17,700
Accounts receivable 25,200 22,300
Investments 20,000 16,000
Equipment 60,000 70,000
Accumulated depreciation (14,000) (10,000)
Total $106,400 $116,000
Accounts payable $ 14,600 $ 11,100
Bonds payable 10,000 30,000
Common stock 50,000 45,000
Retained earnings 31,800 29,900
Total $106,400 $116,000
Additional information:
1. Net income was $18,300. Dividends declared and paid were $16,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for
$3,300.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except
the change in accumulated depreciation.
Instructions
(a) Prepare a statement of cash flows for 2011 using the indirect method.
(b) Compute free cash flow.

 

the next problem is;

 

P14-3 Condensed balance sheet and income statement data for Kersenbrock Corporation
appear below.
KERSENBROCK CORPORATION
Balance Sheets
December 31
2012 2011 2010
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statements
For the Years Ended December 31
2012 2011
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
1. The market price of Kersenbrock’s common stock was $4.00, $5.00, and $8.00 for 2010, 2011,
and 2012, respectively.
2. All dividends were paid in cash.
Instructions
(a) Compute the following ratios for 2011 and 2012.
(1) Profit margin.
(2) Asset turnover.
(3) Earnings per share. (Weighted-average common shares in 2012 were 32,000 and in 2011
were 31,000.)
(4) Price-earnings.
(5) Payout.
(6) Debt to total assets.
(b) Based on the ratios calculated, discuss briefly the improvement or lack
thereof in financial position and operating results from 2011 to 2012 of Kersenbrock
Corporation.

 

 

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