managerial accounting 1b ch13 498811

2013

2012

2011

2010

2009

Sales

$ 283,880

$ 271,800

$ 253,680

$ 235,560

$ 151,000

Cost of goods sold

129,200

123,080

116,280

107,440

68,000

Accounts receivable

19,100

18,300

17,400

16,200

10,000

Compute trend percents for the above accounts, using 2009 as the base year. (Omit the “%” sign in your response.)

Sanderson Company s year-end balance sheets follow.

At December 31

2012

2011

2010

Assets

Cash

$

30,800

$

35,625

$

36,800

Accounts receivable, net

88,500

62,500

49,200

Merchandise inventory

111,500

82,500

53,000

Prepaid expenses

9,700

9,375

4,000

Plant assets, net

277,500

255,000

229,500

Total assets

$

518,000

$

445,000

$

372,500

Liabilities and Equity

Accounts payable

$

128,900

$

75,250

$

49,250

Long-term notes payable secured by
mortgages on plant assets

97,500

102,500

82,500

Common stock, $10 par value

162,500

162,500

162,500

Retained earnings

129,100

104,750

78,250

Total liabilities and equity

$

518,000

$

445,000

$

372,500

Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final answers to 1 decimal place. Omit the “%” sign in your response.)

Sanderson Company s year-end balance sheets follow.

At December 31

2012

2011

2010

Assets

Cash

$

30,800

$

35,625

$

36,800

Accounts receivable, net

88,500

62,500

49,200

Merchandise inventory

111,500

82,500

53,000

Prepaid expenses

9,700

9,375

4,000

Plant assets, net

277,500

255,000

229,500

Total assets

$

518,000

$

445,000

$

372,500

Liabilities and Equity

Accounts payable

$

128,900

$

75,250

$

49,250

Long-term notes payable secured by
mortgages on plant assets

97,500

102,500

82,500

Common stock, $10 par value

162,500

162,500

162,500

Retained earnings

129,100

104,750

78,250

Total liabilities and equity

$

518,000

$

445,000

$

372,500

The company s income statements for the years ended December 31, 2012 and 2011, follow. Assume that all sales are on credit:

For Year Ended December 31

2012

2011

Sales

$

672,500

$

530,000

Cost of goods sold

$

410,225

$

344,500

Other operating expenses

208,550

133,980

Interest expense

11,100

12,300

Income taxes

8,525

7,845

Total costs and expenses

638,400

498,625

Net income

$

34,100

$

31,375

Earnings per share

$

2.10

$

1.93

Section Break

Exercise 13-9 Liquidity analysis and interpretation L.O. P3

(1)

Compute days’sales uncollected. (Use 365 days a year. Do not round intermediate calculations and roundyour final answers to the nearest whole number.)

(2)

Compute accounts receivable turnover. (Round your answers to 1 decimal place.)

2012

2011

(3)

Compute inventory turnover. (Round your answers to 1 decimal place.)

(4)

Compute days’ sales in inventory. (Use 365 days a year. Do not round intermediate calculations and round your final answers to the nearest whole number.)

2012

2011

Selected comparative financial statements of Bennington Company follow:

BENNINGTON COMPANY

Comparative Income Statements

For Years Ended December 31, 2012, 2011, and 2010

2012

2011

2010

Sales

$

444,000

$

340,000

$

236,000

Cost of goods sold

267,288

212,500

151,040

Gross profit

176,712

127,500

84,960

Selling expenses

62,694

46,920

31,152

Administrative expenses

40,137

29,920

19,470

Total expenses

102,831

76,840

50,622

Income before taxes

73,881

50,660

34,338

Income taxes

13,764

10,370

6,962

Net income

$

60,117

$

40,290

$

27,376

BENNINGTON COMPANY

Comparative Balance Sheets

December 31, 2012, 2011, and 2010

2012

2011

2010

Assets

Current assets

$

48,480

$

37,924

$

50,648

Long-term investments

0

500

3,720

Plant assets, net

90,000

96,000

57,000

Total assets

$

138,480

$

134,424

$

111,368

Liabilities and Equity

Current liabilities

$

20,200

$

19,960

$

19,480

Common stock

72,000

72,000

54,000

Other paid-in capital

9,000

9,000

6,000

Retained earnings

37,280

33,464

31,888

Total liabilities and equity

$

138,480

$

134,424

$

111,368

Required:

Compute each year’s current ratio. (Round your answers to 1 decimal place.)

Current ratio

December 31, 2012:

Current ratio

December 31, 2011:

Current ratio

December 31, 2010:

Express the income statement data in common-size percents. (Round your answers to 2 decimal places. Omit the “%” sign in your response.)

Express the balance sheet data in trend percents with 2010 as the base year. (Round your answers to 2 decimal places. Leave no cells blank – be certain to enter “0” wherever required. Omit the “%” sign in your response.)