Chapter 14 Financial Statement Analysis The Big Picture(FILEminimizer)

Chapter 14 Financial Statement Analysis The Big Picture(FILEminimizer)

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Exercises: Set B 1 EXERCISES: SET B Follow the rounding procedures used in the chapter. E14-1B Financial information for Longbine Inc. is presented below. December 31, 2009 December 31, 2008 Current assets $125,000 $100,000 Plant assets (net) 363,000 330,000 Current liabilities 84,000 70,000 Long-term liabilities 133,000 95,000 Common stock, $1 par 161,000 115,000 Retained earnings 110,000 150,000 Instructions Prepare a schedule showing a horizontal analysis for 2009 using 2008 as the base year. E14-2B Operating data for Herndon Corporation are presented below. 2009 2008 Sales $750,000 $600,000 Cost of goods sold 450,000 390,000 Selling expenses 120,000 84,000 Administrative expenses 60,000 54,000 Income tax expense 36,000 21,000 Net income 84,000 51,000 Instructions Prepare a schedule showing a vertical analysis for 2009 and 2008. E14-3B The comparative condensed balance sheets of Dooley Corporation are presented below. DOOLEY CORPORATION Comparative Condensed Balance Sheets December 31 Assets 2009 2008 Current assets $ 76,000 $ 80,000 Property, plant, and equipment (net) 99,000 90,000 Intangibles 25,000 40,000 Total assets $200,000 $210,000 Liabilities and Stockholders’ Equity Current liabilities $ 40,800 $ 48,000 Long-term liabilities 143,000 150,000 Stockholders’ equity 16,200 12,000 Total liabilities and stockholders’ equity $200,000 $210,000 Instructions (a) Prepare a horizontal analysis of the balance sheet data for Dooley Corporation using 2008 as a base. (b) Prepare a vertical analysis of the balance sheet data for Dooley Corporation in columnar form for 2009. E14-4B The comparative condensed income statements of Filey Corporation are shown below. FILEY CORPORATION Comparative Condensed Income Statements For the Years Ended December 31 2009 2008 Net sales $550,000 $500,000 Cost of goods sold 440,000 420,000 Gross profit 110,000 80,000 Operating expenses 49,500 44,000 Net income $ 60,500 $ 36,000 Prepare horizontal analysis. (SO 3) Prepare vertical analysis. (SO 4) Prepare horizontal and vertical analyses. (SO 3, 4) Prepare horizontal and vertical analyses. (SO 3, 4)
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2 Chapter 14 Financial Statement Analysis: The Big Picture Instructions (a) Prepare a horizontal analysis of the income statement data for Filey Corporation using 2008 as a base. (Show the amounts of increase or decrease.) (b) Prepare a vertical analysis of the income statement data for Filey Corporation in columnar form for both years. E14-5B Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 28, 2006, are as follows. Compute liquidity ratios and compare results. (SO 5) Perform current and acid-test ratio analysis. (SO 5)
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This note was uploaded on 10/25/2011 for the course ACCOUNTING 343 taught by Professor Javad during the Winter '04 term at Al-Quds University.

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Chapter 14 Financial Statement Analysis The Big Picture(FILEminimizer)

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