Problem 1.
These items are taken from the financial statements of Finn Corporation for 2012. All are dollar amounts.
Retained earnings (beginning of year) - 31,000
Utilities expense - 2,000
Equipment - 66,000
Accounts payable - 18,300
Cash - 12,900
Salaries payable - 3,000
Common stock - 13,000
Dividends - 12,000
Service revenue - 72,000
Prepaid insurance - 3,500
Repair expense - 1,800
Depreciation expense - 3,300
Accounts receivable - 14,200
Insurance expense - 2,200
Salaries expense - 37,000
Accumulated depreciation - 17,600
Construct the following:
- an income statement
- a retained earnings statement
- a classified balance sheet for December 31, 2012. (List expenses from largest to smallest amounts, e.g. 10, 5, List assets in order of liquidity and liabilities from largest to smallest amounts, e.g. 10, 5, 1.)
Problem 2. The following information is available for Gerard Corporation, all in dollar amounts.
Format: Title - 2012 - 2011
Current assets - 55,130 - 37,130
Total assets - 241,130 - 206,130
Current liabilities - 23,130 - 31,130
Total liabilities - 73,130 - 101,130
Net income - 81,130 - 41,130
Cash provided by operating activities - 91,130 - 57,130
Preferred stock dividends - 7,130 - 7,130
Common stock dividends - 4,130 - 2,630
Expenditures on property, plant, and equipment - 28,130 - 13,130
Shares outstanding at beginning of year - 41,130 - 31,130
Shares outstanding at end of year - 76,130 - 41,130
- Compute earnings per share for 2012 and 2011 for Gerard. Gerard's primary competitor, Thorpe Corporation, had earnings per share of $1 per share in 2012. (Round Earnings per share to 2 decimal places, e.g. $2.78.)
- Compute the current ratio and debt to total assets ratio for each year.
- Current ratio (Round to 2 decimal places, e.g. 0.78
- Debt to total assets ratio (Round to 2 decimal places, e.g. 78.92%.)
- Compute free cash flow for each year. (If answer is negative enter it with a negative sign preceding the number e.g. -15,000 or in parenthesis e.g. (15,000).)