Answersheet-week2KarishmaSagar2.xlsx
Red Company Homework
| Enter your answers below – numbers only with | ||||
| 2017 | 2016 | |||
| EX2-1 | % of net sales | % of net sales | ||
| 1 | Cost of Sales | 63.20% | 63.40% | |
| 2 | Gross profit | 36.70% | 36.50% | |
| 3 | selling, general, and admin expense | 22.50% | 22.50% | |
| 4 | operating earnings | 14.17% | 13.97% | |
| 5 | net earnings | 10.60% | 9.65% | |
| B. | Discuss which line item (Cost of sales or selling, general and administrative expense) helped to increase the operating earnings and net earnings as a % of Net Sales from 2016 to 2017 | This helped operating earnings and net earnings as a percent of sales go up from 2016 to 2017, because the cost of sales was a little less in 2017. This helped. | ||
| 2017 | 2016 | |||
| EX 2-2 | % of net sales | % of net sales | ||
| 1 | Total receivables, net | 12.25% | 11.79% | |
| 2 | Inventories, net | 22% | 22.17% | |
| 3 | Accounts payable | 14.17% | 13.61% | |
| 4 | Retained earnings | 7.50% | 7.88% | |
| 5 | Total stockholders' equity | 41.31% | 39.72% | |
| B. | Did liabilities or equity finance more of Toro's Total assets in 2017? | liabilities | ||
| 2017 | 2016 | |||
| EX-2-3 | % of net sales | % of net sales | ||
| 1 | Net sales | 4.72% | 0.05% | |
| 2 | Cost of sales | 4.21% | 2.40% | |
| 3 | Gross profit | 5.28% | 4.69% | |
| 4 | selling, general, and admin expense | 4.72% | 0.62% | |
| 5 | net earnings | 18.89% | 14.58% | |
| B. | Coment on the percent change in gross profit from 2016 to 2017 compared to the percent change in net sales from 2016 to 2017 | It is the percentage change in net sales from 2016 to 2017. Even though net sales have gone up a lot from last year compared to gross profit. | ||
| 2017 | 2016 | |||
| EX2-4 | % of net sales | % of net sales | ||
| 1 | Total receivables, net | $19,808 | 12.13% | |
| 2 | Inventories, net | $21,958 | 7.15% | |
| 3 | Accounts payable | $37,084 | 21.23% | |
| 4 | Retained Earnings | $54,285 | 11.30% | |
| B. | Comment on the percent change in inventory from 2016 to 2017 compared to the percent change in cost of sales from 2016 to 2017 | When you compare the percentage changes in inventory from 2016 to 2017 to the percentage changes in cost of sales from 2016 to 2017, you see that inventory changed more than cost of sales changed. | ||
Internet Exercise
| Big RockCandy Mountain Mining Co. | ||||
| Income Statement | ||||
| For the Year Ended Dec. 31,2020 | ||||
| 2020 | 2019 | |||
| Sales | 412,500 | 398,600 | ||
| Cost of Goods Sold | 318,786 | 315,300 | ||
| Gross Profit | 93,714 | 83,300 | =B5-B6 | |
| Selling and G&A Expenses | 26,250 | 24,550 | ||
| Other Expenses | 1,210 | 1,245 | ||
| Depreciation Expense | 29,800 | 29,652 | ||
| EBIT | 36,454 | 27,853 | =B7-SUM(B8:B10) | |
| Interest Expense | 8,582 | 8,457 | ||
| Earnings Before Taxes | 27,872 | 19,396 | =B11-B12 | |
| Taxes | 6,968 | 4,849 | =B13*B18 | |
| Netlncome | 20,904 | 14,547 | =B13-B14 | |
| Notes: | ||||
| Tax Rate | 0.25 | 0.25 | ||
| Shares | 52,100 | 52,100 | ||
| EPS | $0.40 | $0.40 | ||
| Big Rock Candy Mountain Mining Co. | ||||
| Balance Sheet | ||||
| As of Dec. 31,2020 | ||||
| Assets | 2020 | 2019 | ||
| Cash | 16,435 | 11,596 | ||
| Accounts Receivable | 45,896 | 47,404 | ||
| Marketable Securities | 3,656 | 619 | ||
| Inventory | 52,397 | 54,599 | ||
| Total Current Assets | 118,384 | 114,218 | =SUM(B5:B8) | |
| Gross Fixed Assets | 436,573 | 397,023 | ||
| Accumulated Depreciation | 87,450 | 57,650 | ||
| Net Plant & Equipment | 349,123 | 339,373 | =B10-B11 | |
| Total Assets | 467,507 | 453,591 | =B9+B12 | |
| Liabilities and Owner's Equity | ||||
| Accounts Payable | 37,752 | 36,819 | ||
| Accured Expenses | 3,183 | 3,085 | ||
| Total Current Liabilities | 40,935 | 39,904 | =SUM(B15:B16) | |
| Long-term Debt | 170,562 | 178,581 | ||
| Total Liabilities | 211,497 | 218,485 | =B17+B18 | |
| Common Stock | 58,664 | 58,664 | ||
| Additional Paid-In-Capital | 136,807 | 136,807 | ||
| Retained Earnings | 60,539 | 39,635 | ||
| Total Shareholder's Equity | 256,010 | 235,106 | =SUM(B20:B22) | |
| Total Liabilities and Owner's Equity | 467,507 | 453,591 | =B19+B23 | |
| Big Rock Candy Mountain Mining Co. | ||||
| Common Size Income Statement | ||||
| For the years 2019 and 2020 | ||||
| Income Statement | Common Size Income Statement | |||
| 2020 | 2019 | 2020 | 2019 | |
| Sales | 412,500.00 | 398,600.00 | 100.00% | 100.00% |
| Cost of Goods | 318,786.00 | 315,300.00 | 77.28% | 79.10% |
| Gross Profit | 93,714.00 | 83,300.00 | 22.72% | 20.90% |
| Depreciation | 29,800.00 | 29,652.00 | 7.22% | 7.44% |
| Selling & Admin. Expense | 26,250.00 | 24,550.00 | 6.36% | 6.16% |
| Other Operating Expense ___ | 1,210.00 | 1,245.00 | 0.29% | 0.31% |
| Net Operating Income | 36,454.00 | 27,853.00 | 8.84% | 6.99% |
| Interest Expense | 8,582.00 | 8,457.00 | 2.08% | 2.12% |
| Earnings Before Taxes | 27,872.00 | 19,396.00 | 6.76% | 4.87% |
| Taxes | 6,968.00 | 4,849.00 | 1.69% | 1.22% |
| Net Income | 20,904.00 | 14,547.00 | 5.07% | 3.65% |
| New Smyrna Surf Shop | ||||
| Statement of Cash Flows | ||||
| For the Year 2020 | ||||
| Cash Flows from Operations | ||||
| Net Income | 120.540.00 | |||
| Depreciation Expense | 7,148 | |||
| Change in Accounts Receivable | (11,248) | |||
| Change in Inventories | (8,276) | |||
| Change in Accounts Payable | 1,589 | |||
| Total Cash Flows from Operations | 109,753.00 | |||
| Cash Flows from Investing | ||||
| Change in fixed assets | (41,704) | |||
| Total Cash Flows from Investing | S (41,704) | |||
| Cash Flows from Financing | ||||
| Change in Notes Payable | (3,025) | |||
| Change in Long-Term Debt | 755 | |||
| Change in Common Stock | – | |||
| Change in Paid-In Capital | – | |||
| Cash Dividends | (60,000) | |||
| Total Cash Flows from Financing | (62,270.00) | |||
| Net Change in Cash Balance | 5,779.00 | |||
| Check answer against Balance Sheet | ||||
| Beginning Cash From Balance Sheet | 15,187 | |||
| Ending Cash From Balance Sheet | 20,966 | |||
| Net Change in Cash Balance | 5,779.00 | |||
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