ACCOUNTING CHAPTER 12 ASSIGNMENT

ACCOUNTING CHAPTER 12 ASSIGNMENT

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1)

Exercise 12-8 (Part Level Submission)
Shown below are comparative balance sheets for Schmitt Company.

SCHMITT COMPANY
Comparative Balance Sheets
December 31
Assets
2014
2013
Cash
$ 89,080
$ 28,820
Accounts receivable
115,280
99,560
Inventory
218,770
247,590
Land
104,800
131,000
Equipment
340,600
262,000
Accumulated depreciation—equipment
(86,460
)
(41,920
)
Total
$782,070
$727,050
Liabilities and Stockholders’ Equity
Accounts payable
$ 51,090
$ 56,330
Bonds payable
196,500
262,000
Common stock ($1 par)
282,960
227,940
Retained earnings
251,520
180,780
Total
$782,070
$727,050

Additional information:

1. Net income for 2014 was $121,830.
2. Depreciation expense was $44,540.
3. Cash dividends of $51,090 were declared and paid.
4. Bonds payable amounting to $65,500 were redeemed for cash $65,500.
5. Common stock was issued for $55,020 cash.
6. No equipment was sold during 2014.
7. Land was sold for its book value.

Prepare a statement of cash flows for 2014 using the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000, or in parenthesis e.g. (15,000)). 

Compute these cash-based ratios: (Round ratios to 2 decimal places, e.g. 2.56.)

(1) Current cash debt coverage.

 

2) Cash debt coverage.

 

 

Condensed financial data of Odgers Inc. follow.

ODGERS INC.
Comparative Balance Sheets
December 31
Assets
2014
2013
Cash
$ 180,184
$ 107,932
Accounts receivable
195,794
84,740
Inventory
250,875
229,356
Prepaid expenses
63,332
57,980
Long-term investments
307,740
243,070
Plant assets
635,550
540,775
Accumulated depreciation
(111,500
)
(115,960
)
Total
$1,521,975
$1,147,893
Liabilities and Stockholders’ Equity
Accounts payable
$ 227,460
$ 150,079
Accrued expenses payable
36,795
46,830
Bonds payable
245,300
325,580
Common stock
490,600
390,250
Retained earnings
521,820
235,154
Total
$1,521,975
$1,147,893

 

ODGERS INC.
Income Statement Data
For the Year Ended December 31, 2014
Sales revenue
$866,266
Less:
     Cost of goods sold
$302,076
     Operating expenses, excluding depreciation
27,674
     Depreciation expense
103,695
     Income tax expense
60,834
     Interest expense
10,548
     Loss on disposal of plant assets
16,725
521,552
Net income
$ 344,714

Additional information:

1. New plant assets costing $223,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $128,225 and accumulated depreciation of $108,155 were sold for $3,345 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $58,048 was declared and paid during the year.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)