Question
3.Problem 2-6 Income statement [LO1]
Given the following information, prepare an income statement for the Dental Drilling Company. (Input all amounts as positive values. Omit the “$” sign in your response.)
Selling and administrative expense
$
73,000
Depreciation expense
78,000
Sales
521,000
Interest expense
48,000
Cost of goods sold
200,000
Taxes
47,000
6.Problem 2-15 Development of balance sheet [LO3]
Arrange the following items in proper balance sheet presentation (Be sure to list the assets in order of their liquidity. Input all amounts as positive values. Omit the “$” sign in your response):
Accumulated depreciation
$
309,000
Retained earnings
187,000
Cash
14,000
Bonds payable
136,000
Accounts receivable
54,000
Plant and equipment—original cost
775,000
Accounts payable
35,000
Allowance for bad debts
9,000
Common stock, $1 par, 100,000 shares outstanding
100,000
Inventory
70,000
Preferred stock, $59 par, 1,000 shares outstanding
59,000
Marketable securities
24,000
Investments
20,000
Notes payable
34,000
Capital paid in excess of par (common stock)
88,000
9. Problem 2-18 Price-earnings ratio [LO2]
Botox Facial Care had earnings after taxes of $364,000 in 2009 with 200,000 shares of stock outstanding. The stock price was $93.80. In 2010, earnings after taxes increased to $424,000 with the same 200,000 shares outstanding. The stock price was $133.00.
(a)
Compute earnings per share and the P/E ratio for 2009. The P/E ratio equals the stock price divided by earnings per share. (Enter only numeric values.Round your intermediate calculations and final answers to 2 decimal places. Omit the “$” sign in your response.)
Earnings per share
$
P/E ratio
(b)
Compute earnings per share and the P/E ratio for 2010.(Enter only numeric values.Round your intermediate calculations and final answers to 2 decimal places. Omit the “$” sign in your response.)
Earnings per share
P/E ratio
(c)
Why the P/E ratio changed?(Round your intermediate calculations and final answers to 2 decimal places. Omit the “%” sign in your response.)
10.Problem 2-21 Depreciation and cash flow [LO5]
The Jupiter Corporation has a gross profit of $789,000 and $249,000 in depreciation expense. The Saturn Corporation also has $789,000 in gross profit, with $46,600 in depreciation expense. Selling and administrative expense is $216,000 for each company.
(a)
Given that the tax rate is 40 percent, compute the cash flow for both companies.(Omit the “$” sign in your response.)
Jupiter
Saturn
Cash flow
$
$
(b)
What is the difference in cash flow between the two firms? (Omit the “$” sign in your response.)
Difference in cash flow
$
12.Problem 2-24 Book value and market value [LO2, 3]
The Rockford Corporation has assets of $444,000, current liabilities of $51,000, and long-term liabilities of $71,000. There is $35,500 in preferred stock outstanding; 20,000 shares of common stock have been issued.
(a)
Compute book value (net worth) per share.(Round your answer to 2 decimal places. Omit the “$” sign in your response.)
Book value per share
$
(b)
If there is $25,700 in earnings available to common stockholders and Rockford’s stock has a P/E of 19 times earnings per share, what is the current price of the stock?(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the “$” sign in your response.)
Current price
$
(c)
What is the ratio of market value per share to book value per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Ratio
13.Problem 2-25 Book value and market value [LO2, 3]
Amigo Software, Inc., has total assets of $824,000, current liabilities of $164,000, and long-term liabilities of $133,000. There is $83,000 in preferred stock outstanding. Thirty thousand shares of common stock have been issued.
(a)
Compute book value (net worth) per share.(Round your answer to 2 decimal places. Omit the “$” sign in your response.)
Book value per share
$
(b)
If there is $53,000 in earnings available to common stockholders and the firm’s stock has a P/E of 28 times earnings per share, what is the current price of the stock?(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the “$” sign in your response.)
Current price
$
(c)
What is the ratio of market value per share to book value per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Ratio