Acct 301 Week 3 Homework Solutions

Instructor Explanation: Chapter 1, Page 22 Points Received: 4 of 4  Comments: 3. Question : (TCO 4) Using the following balance sheet and income statement data,  what is the earnings per share? Current assets $ 9,000 Net income $ 12,000 Current liabilities 4,000 Stockholders’ equity 27,000 Average assets 44,000 Total liabilities 6,000 Total assets 30,000 Average common shares outstanding was 10,000 Student Answer: $1.20  $2.00  $0.83  $0.44  Instructor Explanation: Chapter 2, Pages 55-56 Points Received: 4 of 4  Comments: 4. Question : (TCO 4) A useful measure of solvency is which of the following? Student Answer: current ratio  earnings per share  return on assets ratio 

Prof. Frazier Acct 301 Week 3 Homework Problem #1 (10 points) Vertical Analysis of Income Statement Revenue and Expense Data for Johnson Technologies are as follows: 2012 2011 Sales $ 800,000 740,000 Cost of Goods Sold 504,000 407,000 Selling Expenses 120,000 140,600 Administrative Expenses 128,000 125,800 Income Tax Expense 33,600 48,100 Instructions a. Prepare an income statement in comparative form, stating each item for both 2012 and 2011 as a percent of sales. Round to one decimal place. b. Comment on the significant changes disclosed by the comparative income statement. Problem #2 (10 points) Current position analysis The following data were taken from the balance sheet of Nealy Company: Dec 31, 2012 Dec 31, 2011 Cash $ 330,000 $ 238,000 Temporary Investments 465,000 385,000 Accounts and Notes Receivable, net 425,000 295,000 Inventories 420,000 291,000 Prepaid Expenses 312,000 141,000 Total Current Assets $ 1,952,000 $1,350,000 Accounts and notes payable(short-term) $ 420,000 400,000

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