From the following data, prepare a classified balance sheet forTaylorsville Cons
ID: 2457541 • Letter: F
Question
From the following data, prepare a classified balance sheet forTaylorsville ConstructionCompany at December 31, 2009.
Accounts payable . . . . . . . . . . . . . . . . . . . . . . $74,300
Accounts receivable . . . . . . . . . . . . . . . . . . . . .113,500
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .512,000
Owners’ equity, 1/1/09 . . . . . . . . . . . . . . . . . .314,300
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 153,600
Distributions to owners during 2009 . . . . . . . . 48,100
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4,250
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 90,000
Mortgage payable . . . . . . . . . . . . . . . . . . . . . .423,400
Net income for 2009 . . . . . . . . . . . . . . . . . . . .109,450
Owners’ equity, 12/31/09 . . . . . . . . . . . . . . . .?
B)Income Statement Preparation
Income Statement Preparation
The following selected information is taken from the records ofPickard and Associates.
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . $143,000
Accounts receivable . . . . . . . . . . . . . . . . . . . . . .95,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . .14,500
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 63,000
Supplies expense . . . . . . . . . . . . . . . . . . . . . . . .31,500
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . .12,000
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . .2,500
Income taxes (30% of income before taxes) . . . . ?
Miscellaneous expense . . . . . . . . . . . . . . . . . . . .5,100
Owners’ equity . . . . . . . . . . . . . . . . . . . . . . .. . . 215,000
Salaries expense . . . . . . . . . . . . . . . . . . . . . . . .78,000
Fees (revenues) . . . . . . . . . . . . . . . . . . . . . . . . .476,000
1. Prepare an income statement for the year ended December 31,2009. (Assume that
11,000 shares of stock are outstanding.)
2. Explain what the EPS ratio tells the reader about Pickard andAssociates
C)Cash Flow Computations
From the following selected data, compute:
1. Net cash flow provided (used) by operating activities.
2. Net cash flow provided (used) by investing activities.
3. Net cash flow provided (used) by financing activities.
4. Net increase (decrease) in cash during the year.
5. The cash balance at the end of the year
Cash receipts from:
Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . $270,000
Investments by owners . . . . . . . . . . . . . . . . . . . . . . .54,000
Sale of building . . . . . . . . . . . . . . . . . . . . . . . . .. . . 90,000
Proceeds from bank loan . . . . . . . . . . . . . . . . . . . . .60,000
Cash payments for:
Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . $ 82,000
Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 3,000
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 4,000
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 36,000
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 67,000
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 20,000
Repayment of principal on loan . . . . . . . . . . . . . . . . .40,000
Purchase of land . . . . . . . . . . . . . . . . . . . . . . . . .. . . 106,000
Cash balance at beginning of year . . . . . . . . . . . . . . . .$386,000
Explanation / Answer
Taylorsville Construction Balance Sheet as of Dec 31,09 Current Assets Cash 153,600 A/R 113,500 Supplies 4,250 Total Current assets 271,350 Long term assets Buildings 512,000 Land 90,000 Total long termassets 602,000 Totalassets 873,350 Current Liabilities A/P 74,300 Total current liabilities 74,300 Long term liabilities Mortgage 423,400 Total long term liabilities 423,400 Shareholder's equity Ownersequity 375,650 Total liabilities & Ownersequity 873,350 Explanation of owners equity calculation Beginning Owner'sequity 314,300 + netincome 109,450 423,750 -distributions to owners 48,100 Ending owner'sequity 375,650 2. Income statement of Pickard & Associates Revenues 476,000 -Expenses Salary exp. 78,000 Rent exp. 12,000 utility exp 2,500 Adv.exp 14,500 Supplies 31,500 Misc.exp 5,100 143,600 Income before taxes 332,400 -30%taxes 99,720 NetIncome 232,680 Income taxes = $ 99,720 Earnings per share Net Income / no.of shareholders 232,680 / 11,000 EPS = $ 21.15 The earnings per share is a goodmeasure of profitability , it gives a view of the comparativeearnings or earnings power of the firm.
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