1. The following (given in scrambled order) are accounts and balances from the accounting records of Alleg, Inc., as of December 31, 2012, after the books were closed for the year.
A. Common stock, authorized 21,000 share
At $1 par value, issued 12,000 shares $12,000
B. Additional paid-in capital 38,000
C. Cash 14,000
D. Marketable securities 17,000
E. Accounts receivable 26,000
F. Accounts Payable 16,000
G. Current maturities of long-term debt 11,000
H. Mortgages payable 80,000
I. Bonds payable 65,000
J. Inventory 33,000
K. Land and buildings 57,000
L. Machinery and equipment 120,000
M. Goodwill 13,000
N. Patents 9,000
O. Other assets 45,000
P. Deferred income taxes (long-term liability) 18,000
Q. Retained earnings 33,000
R. Accumulated depreciation 61,000
Bonds and mortgages generally have 10-30 years until maturity. Marketable securities are short-term investments that can be converted to cash in a matter of minutes.
Required:
a. Prepare a classified balance sheet with a proper heading on a spreadsheet. For assets, use the classifications of current assets, plant and equipment, intangibles, and other assets. For liabilities, use the classifications of current liabilities and long-term liabilities.
b. Compute the total asset turnover rate assuming that total revenues in 2012 were $682,500. (Round to the nearest hundredth, e.g. 3.33)
c. Assume that Alleg's primary competitor has an asset turnover of 2.12. What does this tell you about Alleg's asset management?
2. In 400-800 words, list the four components of GDP and provide an example of each, explaining how each item affects you and the way that you live today.