accounting problems for ACCOUNTING tutors only

SoccerBoss
Category:
Accounting
Price: $5 USD

Question description

P14-3  Condensed balance sheet and income statement data for Kersenbrock Corporation appear below

KERSENBROCK CORPORATION

Balance Sheets

December 31

                                                         2012                2011             2010

    Cash                                               $  25,000          $   20,000           $  18,000

  Receivables(net)                                           50,000           45,000                48,000 

  Other current assets                                         90,000       95,000               64,000 

  Investments                                         75,000        70,000              45,000

  Plant and equipment(net)                                 400,000     370,000       358,000

                               $640,000    $600,000    $533,000

Current Liabilities $  75,000    $  80,000  $  70,000


      Long-term debt                                                               80,000      85,000    50,000

  Common stock,$10 par                                                      340,000    310,000    300,000

   Retained earning                                                                145,000     125,000    113,000

                                                                                            $640,000    $600,000    $533,000 

KERSENBROCK CORPORATION

Income Statements

For the Years Ended December 31

2012         2011

  Sales    $740,000    $700,000

  Less: Sales returns and allowances    40,000     50,000

  Net sales     700,000    650,000 

   Cost of goods sold    420,000    400,000

   Gross profit     280,000  250,000

  Operating expenses (including income taxes)  235,000  220,000

  Net income   $  45,000  $ 30,000 

  Additional Information:

1.  The market price of Kersenbrock’s common stock was $4.00, $5,00, and $8.00 for 2010,2011, and 2012, respectively.

2.  All dividends were paid in cash.


  Instructions

(a)  Compute the following ratios for 2011 and 2012

(1)  Profit margin.

(2)  Asset turnover.

(3)  Earnings per share (Weighted-average common shares in 2012 were 32,000 and 2011 were 31,000)

(4)  Price-earnings

(5)  Payout

(6)  Debt to total assets

(b)  Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2011 to 2012 of Kersenbrock Corporation.


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: University of Virginia
PREMIUM TUTOR
Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1828 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors