s. (a December 31, 2015 i5 points) Based on the information for the T.P. Jarmon
ID: 1170088 • Letter: S
Question
s. (a December 31, 2015 i5 points) Based on the information for the T.P. Jarmon Company for the year ended 1) (3 points) Prepare a common-sized income statement. 2) (5 points) How much is the firm's net working capital, the debt ratio, earnings per share,the operating profit margin, and the net profit margin? 3) (7 points) Complete a statement of cash flows for the period. Hint: calculate cash flows from operations, investment activities, and financing activities ?.?. Jarmon Company Balance Sheet for 12/31/2014 and 12/31/2015 Assets 2014 S 15,000 6,000 42,000 51,000 S 1,200 2015 Cash Marketable securities Accounts receivable Inventory Prepaid rent Total current assets Net plant and equipment Total assets S 14,000 6,200 33,000 84,000 1100 $ 408,300 Liabilities and Equity 2014 48,000 6,000 ccounts payable Accrued expenses Notes payable Total current liabilities Long-term debt Common stockholders' equity Total liabilities and equity 2015 57,000 5,000 13,000 75,000 150,000 $ 69 160Explanation / Answer
Common size income statement
% of sales = value of item/ value of sales
sales
600000
100.00%
cost of goods sold
460000
76.67%
gross profit
140000
23.33%
operating expense
G & A expenses
30000
Depreciation
30000
total operating expenses
60000
10.00%
operating profit
80000
13.33%
interest expense
10000
1.67%
profit before tax
70000
11.67%
less tax
27100
4.52%
net profit
42900
7.15%
Net working capital
current assets-current liabilities
138300-75000
63300
debt ratio
total of liabilities/total assets
earning per share
net income/no of shares
42900/20000
2.145
operating profit margin
operating profit/sales
80000/600000
13.33%
net profit margin ratio
net income/sales
42900/600000
7.15%
cash flow statement
cash flow from operating activities
net income
42900
add depreciation
30000
changes in working capital
increase in marketable securities
-200
decrease in accounts receivables
9000
increase in inventory
-33000
decrease in prepaid expense
100
increase in accounts payable
9000
decrease in accrued expense
-1000
decrease in notes payable
-2000
cash flow from operating activities
54800
cash flow from investing activities
sale of plant equipment
-14000
net cash flow from investing activities
-14000
cash flow from financing activities
payment to long term debt
-10000
issuance of common stock
11100
payment of interest
-10000
payment of dividend
-42900
net cash flow from financing activities
-51800
net cash flow during the year
-11000
opening cash balance
15000
year end cash balance
4000
some information is missing in question so that ending cash balance is not missing. I put all effort but answer is not matching with year end cash balance
Common size income statement
% of sales = value of item/ value of sales
sales
600000
100.00%
cost of goods sold
460000
76.67%
gross profit
140000
23.33%
operating expense
G & A expenses
30000
Depreciation
30000
total operating expenses
60000
10.00%
operating profit
80000
13.33%
interest expense
10000
1.67%
profit before tax
70000
11.67%
less tax
27100
4.52%
net profit
42900
7.15%
Net working capital
current assets-current liabilities
138300-75000
63300
debt ratio
total of liabilities/total assets
earning per share
net income/no of shares
42900/20000
2.145
operating profit margin
operating profit/sales
80000/600000
13.33%
net profit margin ratio
net income/sales
42900/600000
7.15%
cash flow statement
cash flow from operating activities
net income
42900
add depreciation
30000
changes in working capital
increase in marketable securities
-200
decrease in accounts receivables
9000
increase in inventory
-33000
decrease in prepaid expense
100
increase in accounts payable
9000
decrease in accrued expense
-1000
decrease in notes payable
-2000
cash flow from operating activities
54800
cash flow from investing activities
sale of plant equipment
-14000
net cash flow from investing activities
-14000
cash flow from financing activities
payment to long term debt
-10000
issuance of common stock
11100
payment of interest
-10000
payment of dividend
-42900
net cash flow from financing activities
-51800
net cash flow during the year
-11000
opening cash balance
15000
year end cash balance
4000
some information is missing in question so that ending cash balance is not missing. I put all effort but answer is not matching with year end cash balance
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