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(Solved) Hello, I saw the response for question #8 you submitted for me


1.

(TCO A) Below you will find selected information (in millions) from a company's  2012 Annual Report.

Accounts Payable 1,328
Accounts receivable 2,458
Accrued salaries, wages payable 416
Accumulated depreciation (433)
Allowance for doubtful accounts (152)
Cash and cash equivalents 827
Common Stock at par value 388
Goodwill 435
Inventories   1,733
Long-term Investments       122
Long-term debt 3,123
Other Current Assets      358
Other current liabilities 1,056
Other long-term liabilities 882
Other Non-current Assets   124
Paid-in-Capital in Excess of Par Value           1,950
Property, Plant & Equipment 3,773
Retained Earnings          166
Treasury stock (64)




Required:

1:  Using the information provided prepare a Balance Sheet. Separate the current assets from non-current assets and provide a total for each. Also, separate the current liabilities from the non-current liabilities and provide a total for each.



2:  Using the Balance Sheet from your answer above, calculate the Current Ratio and Debt Ratio.

(Points : 36)      
      


Question 2.2. (TCO B) The following selected data was retrieved from a company's financial statements for the year ending January 31, 2013
Accounts Payable 50,500
Accounts Receivable 7,300
Additional Paid-in Capital 60,000
Cash  8,200
Common Stock at $.50 par 4,000
Cost of Goods Sold 480,000
Dividend Revenue 3,000
Income Tax Expense 17,500
Interest Expense  3,220
Net Sales 708,000
Operating, Selling and Administrative Expenses 90,400
Retained Earnings 88,560


Required: 1: Using the information provided above, prepare a multiple-step income statement.



2: Calculate the Profit Margin, and Gross profit rate for the company. Be sure to provide the formula you are using, show your calculations, and discuss your findings and results.



(Points : 36)      
      


Question 3.3.

 (TCO C) Please review the following real-world company's Statement of Cash flows and address the two questions below.

Corporation - For Year Ended 2014
CASH FLOWS STATEMENTS
(In millions)
Year Ended June 30, 2014 2013
Operating Activities
Net income 720 734
Adjustments to reconcile net income to net cash from operations:    
Amortization of deferred property incentives (76) (58)
Depreciation, amortization, and other 508 454
Stock-based compensation expense 88 79
Bad debt expense 41 52
Excess tax benefits from stock-based compensation (22) (23)
Deferred income taxes 7 12
Changes in operating assets and liabilities:
Accounts receivable (161) (93)
Inventories (176) (157)
Other current assets (4) (6)
Accounts payable 15 167
Accrued salaries and wages payable 173 48
Other current liabilities 107 111
Net cash from operations 1,220 1,320
Investing Activities
Capital expenditures (861) (803)
Change in credit card receivables originated at third parties (8) (6)
Purchases of investments (20) (13)
Net cash used in investing (889) (822)
Financing Activities
Principal payments on long-term loans (11) (360)
Proceeds from issuance of debt 34 399
Common stock issued 141 103
Common stock repurchased (610) (515)
Common stock cash dividends paid (251) (234)
Excess tax benefits from stock-based compensation 22 23
Other (23) (5)
Net cash used in financing (698) (589)
Net change in cash and cash equivalents (367) (91)
Cash and cash equivalents, beginning of period 1,194 1,285
Cash and cash equivalents, end of period 827 1,194

Required: 1: Please calculate the percentage increase or decrease in cash for the total line of the operating, investing, and financing sections above and explain the major reasons for the increase or decrease for each of these sections.

2: Please calculate the free cash flow for 2012 and explain the meaning of this ratio.

(Points : 36)      
      


Question 4.4. (TCO D) You are CFO of Goforit, Inc., a wholesale distribution company specializing in emerging technologies. Your CEO is a brilliant marketer, but relies on you to explain issues and choices in accounting and finance. She has heard from other members of a CEO organization to which she belongs that a company?s net income can vary widely depending on which accounting choices are made from the ?GAAP menu.?   

Assuming the goal is to maximize net income, choose an accounting treatment from each of the following scenarios, and explain to your CEO why the choice will produce the desired effect on reported net income for the current year. Include in your answer the effect of the choice on both the income statement and balance sheet.  

Required: 1: Goforit carries significant electronics inventory in a competitive environment in which prices are actually falling. Which inventory valuation method would you choose?LIFO, FIFO, or average cost? Assume that unit purchases exceed unit sales.
2: Goforit has a large investment in warehouse equipment, including conveyor belts, forklifts, and automated packaging systems. Which depreciation method would you choose: straight line (SL) or double declining balance (DDB)? (Points : 36)      
      


Question 5.5.

(TCO F) Please review the following real-world ratios for Johnson & Johnson and Pfizer and address the 2 questions below.

Ratio Name Johnson & Johnson Pfizer
 Gross profit ratio 65.30% 58.9%
Profit margin ratio 17.25% 15.32%
Outstanding Inventory Days 195 days 183 days
Average collection period 49.4 days 53.1 days
Current ratio 2.15 times 2.6 times
Earnings per share $12.00 $19.00
PE Ratio                      16                     20


Required: 1: Please explain the meaning of each of the Pfizer ratios above. 2: Please state which company performed better for each ratio.

(Points : 36)

Question 2:

 

1. Prepare Multistep Income statement

 

Multistep Income statement

 

For the year ended January 31, 2013

 

Net Sales

 

708,000

 

Less: Cost of goods sold

 

480,000

 

Gross Profit

 

228,000

 

Operating,...

 


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