Prepare a statement of cash flows

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Reference no: EM131774040

Question 1. Biven Corporation's balance sheet and income statement appear below:

BALANCE SHEETS


2006

2005

ASSETS

Cash & equivalents

$35,000

$30,000

Accounta receivable

54,000

49,000

Inventory

67,000

58,000

Plant & equipment

580,000

530,000

Accumulated depreciation

(316,000)

(313,000)

   Total Assets

$420,000

$354,000

LIABILITIES & EQUITIES

Accounts payable

$51,000

$57,000

Wages payable

26,000

24,000

Taxes payable

11,000

10,000

Deferred taxes payable

25,000

24,000

Bonds payable (long term)

77,000

90,000

   Total liabilities

190,000

205,000

Common stock

33,000

30,000

Retained earnings

197,000

119,000

   Total equities

230,000

149,000

      Total liabilities & equities

$420,000

$354,000

INCOME STATEMENTS


2006

2005

Sales

$620,000

$520,000

Cost of goods sold

381,000

300,000

Gross margin

239,000

220,000

Selling & Admin expense

103,000

99,000

Net operating income

136,000

121,000

Gain on sale of plant & equipment

20,000

-

Income before tax

156,000

121,000

Income tax

47,000

36,000

Net income

$109,000

$85,000

Cash dividends were $31,000. The company sold equipment for $20,000. The equipment had originally cost $14,000 and was fully depreciated.

Required: Prepare a statement of cash flows for 2006 using the indirect and direct methods.

Question 2. Biven Corporation's balance sheet and income statement appear below:

BALANCE SHEETS

Increase (Decrease)


2006

2005

Amount

Percent

ASSETS



Cash & equivalents

$35,000

$30,000



Accounta receivable

54,000

49,000



Inventory

67,000

58,000



Plant & equipment

580,000

530,000



Accumulated depreciation

(316,000)

(313,000)



   Total Assets

$420,000

$354,000



LIABILITIES & EQUITIES



Accounts payable

$51,000

$57,000



Wages payable

26,000

24,000



Taxes payable

11,000

10,000



Bonds payable

77,000

90,000



Deferred taxes

25,000

24,000



   Total liabilities

190,000

205,000



Common stock

33,000

30,000



Retained earnings

197,000

119,000



   Total equities

230,000

149,000



      Total liabilities & equities

$420,000

$354,000



INCOME STATEMENTS




2006

2005



Sales

$620,000

$520,000



Cost of goods sold

381,000

300,000



Gross margin

239,000

220,000



Selling & Admin expense

103,000

99,000



Net operating income

136,000

121,000



Gain on sale of plant & equipment

20,000

-



Income before tax

156,000

121,000



Income tax

47,000

36,000



Net income

$109,000

$85,000



Cash dividends were $31,000. The company sold equipment for $20,000. The equipment had originally cost $14,000 and was fully depreciated.

Required: Fill in the Amounts and Percent of change in the balance sheet and income statements.

Question 3. Espinola Corporation's most recent balance sheet and income statement appear below:

BALANCE SHEETS


2006

2005

ASSETS

Cash & equivalents

$320,000

$180,000

Accounta receivable

220,000

240,000

Inventory

140,000

130,000

Prepaid expenses

20,000

20,000

   Total current assets

700,000

570,000

Plant & equipment, net

860,000

920,000

   Total Assets

$1,560,000

$1,490,000

LIABILITIES & EQUITIES

Accounts payable

$200,000

$170,000

Accrued payable

80,000

80,000

Notes payable, current

40,000

40,000

   Total current liabilities

320,000

290,000

Bonds payable

210,000

220,000

   Total liabilities

530,000

510,000

Preferred stock, $100 par value, 5%

100,000

100,000

Common stock, $1 par value

100,000

100,000

Additional paid in capital, common stock

150,000

150,000

Retained earnings

680,000

630,000

   Total equities

1,030,000

980,000

      Total liabilities & equities

$1,560,000

$1,490,000

 

INCOME STATEMENT


2006

Sales

$1,220,000

Cost of goods sold

790,000

Gross margin

430,000

Selling & Admin expense

268,000

Net operating income

162,000

Interest expense

26,000

Income before tax

136,000

Income tax

41,000

Net income

95,000

Dividends paid, preferred

5,000

Net income for common shareholders

90,000

Dividends paid, common 

40,000

Net income added to retained earnings

50,000

Beginning retained earnings

630,000

Ending retained earnings

$680,000

   Other:


Market value of stock end of year

$12.87

Tax rate

30%

Bond interest 

10%

Return demanded on preferred stock

10%

Return demanded on common stock

14%

Required compute the following for 2006:

a. Gross margin percentage.

b. Earnings per share (of common stock).

c. Price-earnings ratio.

d. Dividend payout ratio.

dividend per share

dividend payout ratio

e. Dividend yield ratio.

f. Return on total assets.

after tax cost of interest

average total assets

return on total assets

g. Return on common stockholders' equity.

average stockholders equity

average preferred stock

return on equity

h. Book value per share.

i. Working capital.

j. Current ratio.

k. Acid-test ratio.

l. Accounts receivable turnover.

m. Average collection period (days).

n. Inventory turnover.

o. Average sale period (days).

p. Times interest earned.

q. Debt-to-equity ratio. 

r. Show that financial leverage is positive or negative.

Reference no: EM131774040

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