ORIE 3150 Homework #1 Fall 2011 answers

ORIE 3150 Homework #1 Fall 2011 answers - ORIE 3150 1....

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ORIE 3150 Homework #1 Due September 7, 2011 1. E1-13 from the textbook
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2. E1-16
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3. P1-5A
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4. E2-7 5. E2-13
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6. The following data are taken from the financial statements of Rosen, Inc. as of the end of the year 2008. Accounts payable $28,000 Accounts receivable 66,000 Cash 54,000 Gross margin 160,000 Income before income taxes 54,000 Net income 48,000 Other current liabilities 17,000 Total assets 250,000 Total liabilities 200,000 Wages payable 5,000 The number of common shares outstanding at the beginning of the year was 40,000 shares, with 60,000 shares outstanding at the end of the year. Find: (a) Current ratio. (b) Working capital (c) Earnings per share. Current Assets = Accounts Receivable + Cash = $120,000 Current Liabilities = Accounts Payable + Other Current Liabilities + Wages Payable= $50,000 a) Current Ratio = 120000/50000 = 2.40 b) Working Capital = 120,000 – 50,000 = $70,000 c) EPS = $48,000/50,000 = $0.96 per share. Since we do not have any data on when the additional 20,000 shares were issued, we use the approximation of (40,000 + 60,000)/2 = 50,000 shares.
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7. The Williams Corp. purchased new equipment on April 1, 2007, for $78,000 cash.
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ORIE 3150 Homework #1 Fall 2011 answers - ORIE 3150 1....

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