Balance Sheet and Correct Answer

Be Our Guest’s balance sheet shows good signs of liquidity. Current Ratios for the past four years have remained above 1 proving that the company can handle its current liabilities. The current ratios are not extremely high (19941.27, 1995- 2.17, 1996- 1.15 and 1997- 1.16), but they can cover the current liabilities. It is important to note that the company is operating on a thin line because the current assets are barely covering the current liabilities. This is particularly unpleasant because we are dealing with a company operating in a seasonal business. It is a concern that the current ratio slightly eroded after 1995, and this is primarily due to Be Our Guest converting the bank line into long term debt in

2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change affect profits in future years?

Operating cash flow was not enough to cover capital investments (this firm does not to appear to pay dividends as it does not show in the prior 3 years). The firm is financing it operations from the issuance of common stock. $23,082 was raised during the period, which is covering its investments in capital expenditures.

The bond principal repayment will be $6.25 million annually. The cash dividends will be $7.5 million annually on additional stock.

2. New bank credit facility, 600 million cash on hand to take advantage of opportunities that may arise

Assume Hospital A is a for-profit organization that pays taxes at a rate of 30 percent and Hospital B is a not-for-profit organization that pays no taxes. If depreciation expense for the year that ended on December 31, 2012, were doubled (e.g., from $100,000 to $200,000) for both organizations, which of the following statements is most correct?

Debit Retained Earnings $96,000; credit Common Stock Dividend Distributable $80,000; credit Paid-In Capital in Excess of Par Value, Common Stock $16,000.

1. Based on the 10 percent compensating balance requirement, how much would Pierce Control Systems have to borrow to acquire $10 million in needed funds?

(b) Calculate by how much the proposed addition will either increase or reduce operating income. Show all work.

Using the AFN equation, it was calculated (assuming there were no dividends paid, and that sales were expected to grow to $3.6 million) that the amount of extra funding needed would be approximately $76,360. This amount would

Net book value at end of year 1 is $8,793. Less what you received on the sale $7,500. Gives you a disposal loss of $1,293 using the straight-line method of depreciation. You then add the disposal loss from the previous years depreciation $1,880, which results in a total income statement impact of $3,173.

The year 2006 income statement of Garret & Sons Music Company reported net sales of $10 million, cost of goods sold of $6 million, and net income of $1 million. The following table shows the company's comparative balance sheets for 2006 and 2005:

= ($119.72 x 203.5 million) + $(33.7 + 770.1 + 0 + 0 - 4947.4) million = $20.2 billion

Balance sheets and income statements are a snapshot of a company’s stability and financial situation. Combined the statements show the income, expenses, and stockholder’s equity in the company. These statements are often analyzed by financial institutions when a company comes to them needing a loan. Stockholders and other investors also look at these statements to make sure their investment will return a profit for them. This paper will look at four different companies and their balance sheets and income statements. The companies are Eastman Chemical Company, Covenant Transportation

Financial results and conditions vary among companies for a number of reasons. One reason for the variation can be traced to the characteristics of the industries in which companies operate. For example, some industries require large investments in property, plant, and equipment (PP&E), while others require very little. In some industries, the competitive productpricing structure permits companies to earn significant profits per sales dollar, while in other industries the product-pricing structure imposes a much lower profit margin. In most low-margin industries, however, companies often experience a relatively high rate of product throughput. A second reason for some of the