Uhura Company Essay Sample

July 27, 2017 History

E5-5 ( Preparation of a Corrected Balance Sheet ) Uhura Company has decided to spread out its operations. The bookkeeper late completed the balance sheet presented below in order to obtain extra financess for enlargement.

InstructionsPrepare a revised balance sheet given the available information. Assume that the accrued depreciation balance for the edifices is $ 160. 000 and for the office equipment. $ 105. 000. The allowance for dubious histories has a balance of $ 17. 000. The pension duty is considered a long-run liability.

Uhura CompanyBalance Sheet31-Dec-07AssetsCurrent assetsCash $ 230. 000Trading securities—at just value $ 120. 000Accounts receivable $ 357. 000Less: Allowance for doubtfulaccounts $ 17. 000 $ 340. 000Inventories. at lower of averagecost or market $ 401. 000Prepaid disbursals 12. 000Total current assets $ 1. 103. 000Long-term investmentsLand held for future usage $ 175. 000Cash surrender value of lifeinsurance 90. 000 $ 265. 000Property. works. and equipmentBuilding $ 730. 000Less: Accum. depr. —building 160. 000 $ 570. 000Office equipment $ 265. 000Less: Accum. depr. —officeequipment 105. 000160. 000730. 000Intangible assetsGoodwill 80. 000Total assets $ 2. 178. 000Liabilities and Stockholders EquityCurrent liabilitiesAccounts collectible $ 135. 000Notes collectible ( due next twelvemonth )

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125. 000Rent collectible 49. 000Total current liabilities $ 309. 000Long-term liabilitiesBonds collectible $ 500. 000Add: Premium on bonds collectible 53. 000 $ 553. 000Pension duty 82. 000635. 000Total liabilities 944. 000Stockholders equityCommon stock. $ 1 par. authorized400. 000 portions. issued 290. 000shares 290. 000Additional paid-in capital 160. 000450. 000Retained net incomes 784000Total shareholders equity 1. 234. 000Total liabilities and stock-holders equity $ 2. 178. 000E5-12 ( Preparation of a Balance SheetPresented below is the test balance of John Nalezny Corporation at December 31. 2007.

InstructionsPrepare a balance sheet at December 31. 2007. for John Nalezny Corporation. Ignore income revenue enhancements.

John Nalezny CorporationBalance Sheet31-Dec-07AssetsCurrent assetsCash $ 197. 000Trading securities ( at just value ) $ 153. 000Accounts receivable $ 435. 000Less: Allowance for doubtfulaccounts 25. 000410. 000Inventories 597. 000Total current assets 1. 357. 000Long-term investmentsInvestments in bonds $ 299. 000Investments in stocks 277. 000Total long-run investings 576. 000Property. works. and equipmentLand $ 260. 000Buildings 1. 040. 000Less: Accum. depreciation -152. 000 $ 888. 000Equipment $ 600. 000Less: Accum. depreciation -60. 000540. 000Total belongings. works. andequipment 1. 688. 000Intangible assetsFranchise $ 160. 000Patent 195. 000Total intangible assets 355. 000Total assets $ 3. 976. 000Liabilities and Stockholders EquityCurrent liabilitiesAccounts collectible $ 455. 000Short-term notes collectible 90. 000Dividends collectible $ 136. 000Accrued liabilities 96. 000Total current liabilities $ 777. 000Long-term debtLong-term notes collectible $ 900. 000Bonds collectible 1. 000. 000

Entire long-run liabilities 1. 900. 000Total liabilities 2. 677. 000Stockholders equityPaid-in capitalCommon stock ( $ 5 par ) $ 1. 000. 000Additional paid-in capital 80. 0001. 080. 000Retained earnings* 410. 000Total paid-in capital andretained net incomes 1. 490. 000Less: Treasury stock -191. 000Total shareholders equity 1. 299. 000Total liabilities andstockholders equity $ 3. 976. 000*Computation of Retained Net incomes: Gross saless $ 8. 100. 000Investment revenue63. 000Extraordinary gain80. 000Cost of goods sold-4. 800. 000Selling expenses-2. 000. 000Administrative expenses-900. 000Interest expense-211. 000Net income $ 332. 000Beginning retained net incomes $ 78. 000Net income332. 000Ending retained net incomes $ 410. 000Or stoping retained net incomes can be computed as follows: Entire shareholders equity $ 1. 299. 000Add: Treasury stock191. 000Less: Paid-in capital1. 080. 000Ending retained net incomes $ 410. 000Note to teacher: There is no dividends account. Therefore. the 12/31/07retained net incomes balance already reflects any dividends declared.

E24-2 ( Post-Balance-Sheet Events ) For each of the undermentioned subsequent ( post-balance-sheet ) events. indicate whether a company should ( a ) adjust the fiscal statements. ( B ) unwrap in notes to the fiscal statements. or ( degree Celsius ) neither adjust nor unwrap.

___A___ 1. Colony of federal revenue enhancement instance at a cost well in surplus of the sum expected at year-end.

___C___ 2. Introduction of a new merchandise line.

___ B___ 3. Loss of assembly works due to fire.

___ B ___ 4. Sale of a important part of the companys assets.

___ C___ 5. Retirement of the company president.

___ C___ 6. Prolonged employee work stoppage.

___ C___ 7. Loss of a important client.

___ B___ 8. Issue of a important figure of portions of common stock.

___ A___ 9. Material loss on a year-end receivable because of a clients bankruptcy.

___ C___ 10. Hiring of a new president.

___ A___ 11. Colony of anterior old ages judicial proceeding against the company.

___ B___ 12. Amalgamation with another company of comparable size.

E24-4 ( Ratio Computation and Analysis ; Liquidity ) As loan analyst for Utrillo Bank. you have been presented the undermentioned information.

Each of these companies has requested a loan of $ 50. 000 for 6 months with no collateral offered. Inasmuch as your bank has reached its quota for loans of this type. merely one of these petitions is to be granted.

InstructionsWhich of the two companies. as judged by the information given above. would you urge as the better hazard and why? Assume that the stoping history balances are representative of the full twelvemonth.

Toulouse Co. Lautrec Co.

Composition of current assetsCash13. 19 % 28. 07 % Receivables24. 18 % 26. 49 % Inventories62. 64 % 45. 44 % 100. 00 % 100. 00 % Computation of assorted ratiosCurrent ratio ( $ 910 ? $ 305 ) 2. 98 to 1 ( $ 1. 140 ? $ 350 ) 3. 26 to 1Acid-test ratio ( $ 120 + $ 220 ) ? $ 3051. 11 to 1 ( $ 320 + $ 302 ) ? $ 3501. 78 to 1Accounts receivable turnover ( $ 930 ? $ 220 ) 4. 28 times $ 1. 500 ? $ 3024. 97 timesInventory turnover1. 14a times1. 74b timesCash to current liabilities ( $ 120 ? $ 305 ) . 39 to 10. 393443 ( $ 320 ? $ 350 ) . 91 to 1a ( $ 930 X. 70 ) ? $ 570 B ( $ 1. 500 Ten. 60 ) ? $ 518I would decidedly urge Lautrec Co. as a better hazard. Lautrec Co. has a higher current ratio. acid-test ratio. A/R turnover. and hard currency to current liabilities ratio. The hard currency to current liabilities ratio is of peculiar involvement as Lautrec has merely $ . 91 hard currency to each $ 1. 00 of liabilities. This is non a good ratio. nevertheless. this is a much better ratio so Toulouse Co. s of $ 0. 39 hard currency to each dollar of debt. Toulouse is traveling to hold hard currency inflow jobs of a really serious nature shortly and is a worse hazard.

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