Q1. From the information given below: (10 Marks)
a. Prepare a balance sheet
b. Net working capital
Cash 100,000
Account receivables 72,000
Accounts payable 48,000
Short-term notes payable 35,000
Inventories 70,000
Gross fixed assets 1,750,000
Common stock 680,000
Other current assets 10,000
Accumulated depreciation 524,000
Long-term debt 350,000
Other assets 25,000
Retained earnings ?
Q2. (10 Marks)
Sales $525,000
Cost of goods sold $200,000
General and administrative expenses $62,000
Depreciation expenses 8,000
Interest expense 12,000
Income taxes 97,200
From the information given above, prepare
(a) the income statement, and
(b) the common-sized income statement.
Q3. Prepare a statement of cash flows from the following list of items. (5 Marks)
Increase in inventories 22,000
Operating income 625,000
Dividends 55,000
Increase in accounts payables 92,500
Interest expense 118,000
Increase in common stock 22,000
Depreciation expense 48,000
Increase in accounts receivable 210,000
Increase in long-term debt 145,000
Increase in short-term notes payable 36,500
Increase in gross fixed assets 144,000
Increase in paid in capital 60,000
Income taxes 202,000
Beginning cash 700,000
Q4. Calculate the following ratios from the Balance Sheet and the Income Statement of Saudi Manufacturing Corporation given below: (5 Marks)
a. Current Ratio
b. Debt Ratio
c. Fixed asset turnover
d. Total asset turnover
e. Operating profit margin
Balance Sheet:
Cash 30,000
Acct/Rec 72,500
Inventories 50,000
Current assets 152,500
Net fixed assets 240,000
Total assets 392,500
Accts/Pay 44,500
Accrued expenses 31,000
Short-term N/P 9,500
Current liabilities 85,000
Long-term debt 110,000
Owner's equity 197,500
Total liabilities and owners equity 392,500
Income Statement:
Net sales 450,000
COGS 220,000
Gross profit 230,000
Operating expenses 128,000
Net operating income 102,000
Interest expense 18,500
EBT 83,500
Income taxes 33,000
Net income 50,500
Sample Solution