ACC300 P2-6B Fellenz Corporation and P13-2B Jetson Company

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Problems P2-6B 

Condensed balance sheet and income statement data for Fellenz Corporation are presented below.

FELLENZ CORPORATION 

Balance Sheets

December 31

Assets         2012      2011

Cash$     40,000$ 24,000

Receivables (net)  90,000  55,000 

Other current assets  74,000  73,000

Long-term investments  78,000  60,000

Plant and equipment (net)  520,000  407,000 

Total assets     $802,000     $619,000

Liabilities and Stockholders’ Equity     2012     2011

Current liabilities             $ 88,000        $ 65,000 

Long-term debt               90,000          70,000 

Common stock                370,000       320,000 

Retained earnings           254,000        164,000 

Total liabilities and stockholders’ equity    $802,000     $619,000

FELLENZ CORPORATION 

Income Statements 

For the Years Ended December 31 

 

                          2012            2011 

Sales                 $770,000       $800,000 

Cost of goods sold     420,000    400,000 

Operating expenses (including income taxes)  200,000    237,000

Net income            $150,000             $163,000 

Cash from operating activities       $165,000          $178,000 

Cash used for capital expenditures    85,000           45,000 

Dividends paid                 50,000                  43,000

Average number of shares outstanding      370,000    320,000

Instructions:

Compute the following values and ratios for 2011 and 2012.

(a) Earnings per share. 

(b) Working capital. 

(c) Current ratio. 

(d) Debt to total assets ratio. 

(e) Free cash flow. 

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

 

P13-2B 

The comparative statements of Jetson Company are shown below.

JETSON COMPANY 

Income Statements 

For the Years Ended December 31 

 

                           2012             2011 

Net sales           $780,000        $624,000 

Cost of goods sold        440,000      405,600 

Gross profit            340,000          218,400 

Selling and administrative expense  176,880     149,760 

Income from operations            163,120       68,640 

Other expenses and losses 

Interest expense             9,920      7,200 

Income before income taxes     153,200      61,440 

Income tax expense           38,000          14,000 

Net income               $115,200          $ 47,440 

 

JETSON COMPANY 

Balance Sheets 

December 31

Assets                      2012          2011

Current assets 

Cash                   $ 23,100       $ 21,600

Short-term investments  44,800   33,000 

Accounts receivable     106,200   83,800 

Inventory               116,400        74,000 

Total current assets   290,500     212,400 

Plant assets (net)        485,300     439,600 

Total assets           $775,800         $652,000

Liabilities and StockholdersÂ’ Equity

Current liabilities 

Accounts payable         $138,200          $132,000

Income taxes payable      25,300           24,000

Total current liabilities      163,500        156,000

Bonds payable                132,000        120,000 

Total liabilities                295,500         276,000

Stockholders’ equity 

Common stock ($10 par)   150,000      130,000

Retained earnings             330,300     246,000 

Total stockholdersÂ’ equity  480,300   376,000 

Total liabilities and stockholders’ equity  $775,800    $652,000 

All sales were on account. Net cash provided by operating activities was $108,000. Capital expenditures were $47,000, and cash dividends were $30,900.

Instructions Compute the following ratios for 2012.

(a) Earnings per share. 

(b) Return on common stockholders’ equity

(c) Return on assets.

(d) Current.

(e) Receivables turnover.

(f ) Average collection period

(g) Inventory turnover.

(h) Days in inventory.. 

(i) Times interest earned. 

(j) Asset turnover. 

(k) Debt to total assets. 

(l) Current cash debt coverage. 

(m) Cash debt coverage. 

(n) Free cash flow.

    • 10 years ago
    Fellenz Corporation and Jetson Company __correct w/ Solutions !! USE it as a GUIDE !!!
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