Georgia State University J. Mack Robinson College of Business Spring 2010: FI3300 – Financial Accounting Assignment Instructions 1. Please email an Excel spread sheet for questions 1 – 20 to [email protected] no later than 7:15 PM on February 17, 2010. 2. You may use Excel to solve other problems as well, but Excel is required only for questions 1 - 20. Use cell addresses rather than just the values to calculate formulas. 3. Print out your Balance Sheet, Income Statement and Statement of Cash Flows and turn them in with the completed answer sheet (attached) and either hand-written solutions or excel solutions to the other problems (10 – 30). 4. This assignment includes 6 pages. Read every question carefully and make sure that you are providing the solution that the question is seeking. 5. Last day to submit the assignment is February 17, 2010. Please submit both hard copy and email before class. 6. Follow the instructions and read each question carefully. Make sure you are providing the solution that the question is seeking. 7. You may choose to work alone or with one partner. If two students work together they should submit one copy. Make sure that both names are on the file and hard copy. I will not allow students to add their name later on.1-9. From the information provided below, develop an Excel spread sheet for the Huang Yang Soup Co. (H/Y Soup) (i) Balance Sheet for 2008 and 2009 (ii) Income Statement for 2008 and 2009 (iii) Statement of Cash Flows for 2009, only. Copy the data into the spreadsheet (I prepared a copy on the webpage) and use cell addresses to calculate the different items. Huang Yang Soup Company 2009 2008 Net Sales $4,378,714 $3,988,705 Long-term debt 382,391 314,755 Plant and Property 1,168,129 1,027,460 Excess Capital 38,110 36,268 Taxes 164,000 135,900 Administrative Expenses 244,990 194,319 Notes Payable 88,875 92,109 Inventories 642,007 648,035 Marketing Expenses 544,427 478,341 Accounts Receivable 298,987 279,821 Retained Earnings 1,480,427 1,325,876 Interest Expense 25,581 32,117 Cost of Goods Sold 3,173,491 2,950,204 Cash 35,862 30,181 Equipment 259,864 257,304 Accounts Payable 321,721 274,568 Accruals 215,456 206,594 Other L-T Liabilities 215,462 167,012 Common Stock ($0.8 Par Value) 20,343 20,343 Cash Equivalents 357,936 194,724 Note: Income Statement is a multi-step statement. Balance sheet should include current assets and liabilities, long-term assets and liabilities as well as equity account.10. Determine H/Y Soup’s Net Profit margin for 2008 and 2009 11. Determine H/Y Soup’s Return on Assets for 2008 and 2009 12. Determine H/Y Soup’s Debt Ratio for 2008 and 2009 13. Use the DuPont Identity to determine H/Y Soup’s Return on Equity for 2008 and 2009. 14. How much did H/Y Soup pay in total common dividends in 2009? 15. Determine H/Y Soup’s Inventory Turnover 16. Determine H/Y Soup’s Average Collection Period for 2008 and 2009 17. Determine H/Y Soup’s Gross Profit Margin 18-20. Prepare a common size Balance Sheet and Income Statement for H/Y Soup for 2008 and 200921. The RM Shenshall Corp earned a net profit of €660,000 on sales of €11,000,000 and total assets of €6,000,000. If RM Shenshall’s debt ratio is 30%, what is their ROE? a. 6.0% b. 11.0% c. 15.7% d. 16.2% e. 17.3% 22. During the last year, Delaney, Inc. had sales of $4 million. The cost of its merchandise sold came to $2 million, operating expenses were $400,000, depreciation expense was $100,000 and the firm paid $150,000 in interest on bank loans. Also, the company paid $25,000 to stockholders as dividends. If Delaney had net income of $945,000, what was their tax rate? a. 27% b. 30% c. 42% d. 48% e. 70% 23. Co. A has a negative cash flow from operating activities, a positive cash flow from financing activities and a negative cash flow from investing activities. What can you infer from this information? a. the company could be growing rapidly b. the company is in deep financial trouble c. the company is very healthy and growing appropriately d. the company is likely to be an older company with a high profit margin e. the company is likely in a cyclical industry 24. TP Jarmon Inc. has net working capital of £1,500, current liabilities of £4,300, and inventory of £1,800. What is the current ratio? What is the quick ratio? a. 1.00, 0.51 b. 0.08, 0.58 c. 1.35, 0.93 d. 1.31, 0.82 e. 0. 70, 0.45 25. Why are cash flow and net income not the same for the typical firm? a. they typically are the same b. accrual accounting c. operating expenses are not cash expenses d. they are only the same when there is a net loss, not a profit e. both b and cUSE THE FOLLOWING INFORMATION TO CONSTRUCT A BALANCE SHEET TO ANSWER QUESTIONS 26 through 30 The following information applies to ShopAlot Co. Cash $15,000 Average Collection Period 25 days Net fixed Assets $268,000 Sales $1,224,000 Quick Ratio 0.50 Current Ratio 1.20 Return on Equity 30% Net Profit Margin 6% If ShopAlot only has long-term debt, common equity and current liabilities on the right-hand side of the balance sheet and only cash, accounts receivable, inventories and net fixed assets on the left-hand side of the balance sheet, build a balance sheet and find the following…. (360 days in a year) 26. Accounts Receivable Balance 27. Net Income 28. Inventory 29. Current Liabilities 30. Return on AssetsFI 3300 Corporate Finance Financial Accounting Answer Sheet Assignment 1 Name 1: Name 2: 1 – 9 Printed Balance Sheet and Income Statement for H/Y Soup Company 2008 and 2009. Statement of Cash Flows for 2009. 10. 21. 11. 22. 12. 23. 13. 24. 14. 25. 15. 26. 16. 27. 17. 28. 18. 29. 19. 30.