Acc 300

Problem set

ACC 300

September 24, 2014

Problem set 2

P2-6A

SIEVERT CORPORATION

| 2012 | 2011 |

A) | EARNING PER SHARE |

| |

| $70,000 / $33,000 shares = $2.12 | $60,000 / $30,000 Shares = $2.00 |

B) | WORKING CAPITAL |

| (28,000 + $70,000 + $90,000) – ($75,000) = $113,000 | ($20,000+$62,000+73,000) – ($70,000) = $85,000 |

C) | CURRENT RATIO |

| $188,000 / $75,000 = 2.5:1 | $155,000 / $70,000 = 2.2:1 |

| DEBT TO TOTAL ASSET |

D) | |

| $155,000 / $760,000 = 20.4% | $160,000 / $685,000 = 23.4% |

E) | FREE CASH FLOW |

| $82,000 - $45,000-$20,000 = $17,000 | $56,000 - $38,000 - $15,000 = $3,000 |

F) | The financial position and operating results from 2011 to 2012 of Sievert Corporation are looking good. The net earnings and working capital have increased from the previous year and showing the corporation improved their profits thereby keeping shareholders content. Further, debt to total assets ratio has gone down from the previous year and is reflected in the increase of cash flow. |

P13-2A

LUCILLE COMPANY

| 2012 |

A) | EARNING PER SHARE |

| |

| $290,000/$5= $58,000; $300,000/$5= $60,000; ($58,000 + $60,000)/2 = $59,000; $218,000/$59,000= $3.69 Per shares |

B) | RETURN PER SHARE |

| $218,000/[($465,400 + $603,400)/2]= 40.8% RPS |

C) | RETURN ON COMMON STOCKHOLDERS’EQUITY |

| $218,000/ [($852,800 + 1,026,900)/2]= 23.2% |

| CURRENT RATIO |

D) | |

| $377,900/$203,500 = 1.86: 1 |

E) | RECEIVABLES TURNOVER |

| $1,890,540/ [($102,800 + $117,800)/2] = 17.1 times |

F) | AVERAGE COLLECTION PERIOD |

| 365 days / 17.1 = 21.3 days |

G) | INVENTORY TURNOVER |

| $1,058,540 / [($115,500 + 126,000)/2] = 8.8 times |

H) | DAYS IN INVENTORY |

| 365 days / 8.8 = 41.5 days |

I | TIMES INTEREST EARNED |

| $332,000/$22,000 = 15.1 times |

J | ASSET TURNOVER |

| $1,890,540/ [($1,026,900 + $852,800)/2] = 2.01 times |

K | DEBT TO TOTAL ASSETS |

| $423,500 / $423,500 /...