Question 1: Use the Mason Company\'s 2013 financial statements for answering the

Question

Question 1: Use the Mason Company's 2013 financial statements for answering the questions MASON COMPANY Comparative Balance Sheet December 31, Assets Cash Short-term investments 30,000 10,000 60,000 50,000 35,000 15,000 60,000 50,000 150.000 Inventory.... Property, plant, and equipment.200,000 Liabilities and stockholders ul 40,000 20,000 220,000 30,000 35,000 20,000 200,000 35,000 Long Term Bonds payable.. Common stock $10 Par value (22,000 Shares..... Calculate the following for the year 2013 and 2012 a) Current Assets b) Current Liabilities c) Working Capital d) Shareholder's Equity e) the firm had net income of $440,000 in 2013 and $220,000 in 2012 after tax, what are the earnings per share?

Explanation / Answer

Solution:(a): For 2012:

Current Assets = cash+short-term investments+Accounts Receivable+inventory

= 35000+15000+60000+50000 = $160,000

Current liabilities= Accounts Payable+short-term notes payable= 30000+35000= $65,000

Working capital= Current assets-current liabilities

= 160000-65000 = $95,000

Shareholder's Equity = common stock+retained Earnings = 200000+35000 =$235,000

Earning per share = net income/outstanding common stock = 220000/20000 = $11/share

For 2013:

Current Assets= 30000+10000+60000+50000

= $150,000

current liabilities= 10000+40000= $50,000

Working capital= 150000-50000 = $100,000

Shareholder's Equity = 220000+60000 = $280,000

Earnings per share= 440000/22000 = $22/share

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