Ch.2 - BRIEF EXERCISE 2-1 CL Accounts payable CA Accounts...

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BRIEF EXERCISE 2-1 CL Accounts payable CL Income tax payable CA Accounts receivable LTI Investment in long-term bonds PPE Accumulated depreciation PPE Land PPE Building CA Merchandise inventory CA Cash IA Patent IA Goodwill CA Supplies BRIEF EXERCISE 2-2 RONDELLI COMPANY Partial Balance Sheet Current assets Cash. ........................................................................................... $10,400 Short-term investments. ........................................................... 8,200 Accounts receivable. ................................................................ 14,000 Supplies. ..................................................................................... 3,800 Prepaid insurance. .................................................................... 3,300 Total current assets. ......................................................... $39,700 BRIEF EXERCISE 2-3 Earnings per share = = = $1.68 per share BRIEF EXERCISE 2-4
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ICS Issued new shares of common stock DRE Paid a cash dividend IRE Reported net income of $75,000 DRE Reported net loss of $20,000
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BRIEF EXERCISE 2-5 Working capital = Current assets – Current liabilities Current assets ( $102,500,000 Current liabilities 201,200,000 Working capital ($ 98,700,000 ) Current ratio: = = .51:1 BRIEF EXERCISE 2-6 Current ratio (a) = 0.89:1 Debt to total assets (b) = 85.5% Free (c) cash flow $55,472 – $24,787 – $15,000 = $15,685 BRIEF EXERCISE 2-7 (a) True. (b) False. BRIEF EXERCISE 2-8
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(a) Forecasts/predicts. (b) Confirms or corrects/provides feedback. (c) Verifiable. (d) Faithful representation. (e) Comparability.
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BRIEF EXERCISE 2-9 (a) Relevant. (b) Reliability. (c) Consistency. BRIEF EXERCISE 2-10 (a) 1. Predictive value. (b) 2. Neutral. (c) 3. Verifiable. (d) 4. Timely. BRIEF EXERCISE 2-11 (c) BRIEF EXERCISE 2-12 (a) Conservatism. (b) Materiality. (c) Materiality. SOLUTIONS TO DO IT! REVIEW EXERCISES DO IT! 2-1 THEREMIN CORPORATION Balance Sheet (partial) December 31, 2010 Assets Current assets Cash . .................................................................. $ 13,000 Accounts receivable. ......................................... 22,000 Inventory. ............................................................ 58,000 Supplies. ............................................................. 9,000 Total current assets. ................................ $102,000 Property, plant, and equipment Equipment. .......................................................... $180,000
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Less: Accumulated depreciation. .................... 45,000 135,000 Total assets. ................................................................ $237,000 DO IT! 2-2 IA Trademarks CA Inventories CL Current maturities of long-term debt PPE Accumulated depreciation NA Interest revenue PPE Land improvements CL Taxes payable SE Common stock LTI Long-term marketable debt securities NA Advertising expense CL Unearned consulting fees LTL Mortgage note payable due in 3 years DO IT! 2-3 (a) 2010 2009 ($80,000 – $6,000) = $1.29
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This note was uploaded on 01/18/2011 for the course FINANCE AC acct200 taught by Professor Hamdibilici during the Fall '10 term at CSU Long Beach.

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Ch.2 - BRIEF EXERCISE 2-1 CL Accounts payable CA Accounts...

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