This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash fow statement,analysis, a horizontal analysis, and some ra±o calcula±ons. Scroll down the spreadsheet to complete each part
| This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash flow statement, a vertical | ||||||
| analysis, a horizontal analysis, and some ratio calculations. Scroll down the spreadsheet to complete each part. | ||||||
| Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended 12/31/2015. | ||||||
| They have completed the balance sheet and income statement as shown. | ||||||
| Philadelphia Widget Corporation | ||||||
| Income Statement | ||||||
| For the year ended 12/31/2015 | ||||||
| Revenue | 1,235,000 | |||||
| Cost of Goods Sold | 806,356 | |||||
| Gross Profit | 428,644 | |||||
| Administrative Expenses: | ||||||
| Salaries | 212,450 | |||||
| Rent | 82,500 | |||||
| Depreciation | 24,800 | |||||
| Total Administrative Expense | 319,750 | |||||
| Operating Profit | 108,894 | |||||
| Gain on Sale of Equipment | 4,500 | |||||
| Interest Expense | (42,115) | |||||
| Net Income | 71,279 | |||||
| Philadelphia Widget Corporation | ||||||
| Balance Sheet | ||||||
| As of 12/31/2015, 12/31/2014, and 12/31/2013 | ||||||
| 2015 | 2014 | 2013 | ||||
| Cash | 119,411 | 89,564 | 105,644 | |||
| Accounts Receivable | 85,455 | 83,118 | 78,400 | |||
| Inventory | 41,600 | 48,560 | 62,600 | |||
| Prepaid Expenses | 14,500 | 18,100 | 24,000 | |||
| Total Current Assets | 260,966 | 239,342 | 270,644 | |||
| Land | 50,000 | 50,000 | 50,000 | |||
| Buildings and Equipment | 182,450 | 172,450 | 166,800 | |||
| Accumulated Depreciation | 78,900 | 103,550 | 62,600 | 109,850 | 54,580 | 112,220 |
| Total Assets | 414,516 | 399,192 | 432,864 | |||
| Accounts Payable | 62,525 | 51,480 | 45,200 | |||
| Wages payable | 4,500 | 4,500 | 1,500 | |||
| Unearned Revenue | 3,000 | – | – | |||
| Current Portion of Long-Term Debt | 50,000 | 50,000 | 50,000 | |||
| Total Current Liabilities | 120,025 | 105,980 | 96,700 | |||
| Long-Term Debt | 175,000 | 225,000 | 275,000 | |||
| Common Stock, 3500 shares outstanding | 35,000 | 35,000 | 35,000 | |||
| Retained Earnings | 84,491 | 33,212 | 26,164 | |||
| Total Stockholders’ Equity | 119,491 | 68,212 | 61,164 | |||
| Total Liabilities and Equity | 414,516 | 399,192 | 432,864 | |||
| A. Prepare a Statement of Cash Flow using the indirect method for 2015 using the above statements and the following additional information: | ||||||
| 1. Equipment costing $30,000 was purchased in 2015. | ||||||
| 2. Equipment having an original cost of $20,000 and accumulated depreciation of $8,500 was sold for $16,000 during 2015. | ||||||
| 3. A dividend of $20,000 was declared and paid in 2015. | ||||||
| Philadelphia Widget Corporation | ||||||
| Statement of Cash Flow | ||||||
| For the year ended 12/31/2015 | ||||||
| Cash flows from operating activities | ||||||
| Cash received from customers | 119,411 | |||||
| Less cash paid for: | ||||||
| Merchandise inventory | 41,600 | |||||
| Wages | ||||||
| Interest | ||||||
| Other operating expenses | ||||||
| Income taxes | ||||||
| Net cash provided by operating exp. | ||||||
| B. Prepare a vertical analysis (1 year) of the income statement above and a horizontal analysis (2 years) of the balance sheet. | ||||||
| Philadelphia Widget Corporation | ||||||
| Vertical Analysis of Income Statement | ||||||
| Philadelphia Widget Corporation | ||||||
| Horizontal Analysis of Balance Sheet | ||||||
| * n/c = not calculable | ||||||
| C. Calculate the following ratios based on 12/31/2015 numbers: | ||||||
| 1. Earnings per share | ||||||
| 2. Return on common stockholder’s equity | ||||||
| 3. Return on assets | ||||||
| 4. Current ratio | ||||||
| 5. Acid-test ratio | ||||||
| 6. Accounts receivable turnover | ||||||
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