Accounting homework, needed by 04/30/15 10PM

Question 5.

“Look how great we are doing,” said Sawyer Mittlestaedt, president of Elliott Company. “Our sales have grown from $1.6 million to $2.0 million this year, we about doubled our warehouse space, and we have more cash in the bank than we started with. A few more years of growth like this and we’ll be tops in the industry.”

Don't use plagiarized sources. Get Your Custom Essay on
Accounting homework, needed by 04/30/15 10PM
Get a PLAGIARISM-FREE custom essay written for you!
Order Essay

 

“Yes, our statements look pretty good,” replied Endia Bush, the company’s vice president for finance. “But I have concerns that we’re doing business with a lot of companies we don’t know much about. But I do agree, we’re certainly selling a lot of merchandise; our inventory is actually down from last year.”

 

See statements on next page.


Elliott Company

Comparative Balance Sheets

At December 31, 2015 and 2014

 

   

     2015

2014

 

Assets

 

 

 

Current assets:

 

 

 

Cash.

$42,000

$     27,000

15000 incr

Marketable securities

  19,000

       13,000

 

Accounts receivable.

710,000

     530,000

 

Inventory 

848,000

860,000

 

Prepaid expenses

   10,000

5,000 

 

Total current assets

1,435,000 

1,629,000

 

Long-term investments 

60,000

110,000 

 

Loans to subsidiaries

130,000

80,000 

 

Plant and equipment  

3,170,000

2,600,000

 

  Less accumulated depreciation   

810,000

755,000 

 

Net plant and equipment   

2,360,000

1,845,000 

 

Patents 

84,000

90,000 

 

Total assets 

$4,263,000

$3,560,000 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

  Accounts payable

$   970,000

$   670,000

 

  Accrued liabilities

65,000

 82,000 

 

Total current liabilities

  1,035,000

752,000

 

Long-term Bonds Payable

820,000

600,000

 

Notes payable

95,000

80,000 

 

Total liabilities

1,950,000

1,432,000

 

Stockholders’ equity:

 

 

 

  Common stock

  1,740,000

1,650,000

 

  Retained earnings .

573,000

478,000 

 

Total stockholders’ equity

  2,313,000

2,128,000 

 

Total liabilities and stock

$4,263,000

3,560,000

 

 

Elliott’s income statement for 2015 follows

 

Sales

 

$2,000,000

Cost of goods sold 

 

1,300,000  

Gross profit

 

700,000

Selling and administrative expenses

  

490,000  

Net operating income

 

210,000

Nonoperating items:

 

 

  Gain on sale of investments 

$60,000

 

  Loss on sale of equipment.

20,000

40,000

Income before taxes 

 

 250,000

Income taxes

 

  80,000  

Net income  

 

$   170,000  

 

The following additional information is available about Elliott’s activities during 2015:

  1. Cash dividends declared and paid to the common stockholders totaled $75,000.
  2. Long-term BONDS with a value of $380,000 were repaid during the year.
  3. Equipment was sold during the year for $70,000. The equipment had cost $130,000 and had $40,000 in accumulated depreciation on the date of sale.
  4. Long-term investments were sold during the year for $110,000. These investments had cost $50,000 when purchased several years ago.

 

 

5-1. Ms. Bush asks you to prepare a statement of cash flow (indirect method) for 2015.

 

5-2. What is Elliott’s free cash flow? Interpret your findings.

 

5-3. Is Elliott Corp. doing as well as its CEO believes? Discuss.

 

Question 7.

     Thompson Co. had the following investment transactions during the current year.

 

Feb. 6

Purchased 1,000 shares of Fernandez Finance Co. for $40 per share plus brokerage costs of $225. Thompson intends to sell these shares when the timing is right to make a gain.

 

 

Mar. 31

Purchased 15 $1,000 face, 8% bonds of Brown Corp. at 97½. They mature in ten years, and interest is paid seminannually on February 1 and August 1. Thompson has the intent and ability to hold these until maturity. Thompson also determines that the difference between effective interest rate amortization and straight-line is immaterial.

 

 

June 20

Received a $2.20 per share dividend on Fernandez Finance Co. shares.

 

 

August 1

Received interest check from Brown Corp.

 

 

Sept. 4

Acquired 4,000 shares of Jurgeson Conglomerate’s stock for $30 per share plus $600 transaction costs. These shares were classified as available-for-sale securities.

 

 

Dec. 31

Market values of Fernandez Finance Co. and Jurgeson Conglomerate stock were $45 and $28 per share, respectively. Brown Corp. bonds were trading at 99.

 

1-1. Prepare journal entries with appropriate supporting computations for the year’s transactions.

 

1-2. Show how each investment would be reported in Thompson’s financial statements…

 

 

 

Homework Paper
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All our papers are original and written from scratch. We will email you a plagiarism report alongside your completed paper once done.

Free Revisions

All papers are submitted ahead of time. We do this to allow you time to point out any area you would need revision on, and help you for free.

Free Title-page

A title page preceeds all your paper content. Here, you put all your personal information and this we give out for free.

Free Bibliography

Without a reference/bibliography page, any academic paper is incomplete and doesnt qualify for grading. We also offer this for free.

Originality & Security

At Homework Sharks, we take confidentiality seriously and all your personal information is stored safely and do not share it with third parties for any reasons whatsoever. Our work is original and we send plagiarism reports alongside every paper.

24/7 Customer Support

Our agents are online 24/7. Feel free to contact us through email or talk to our live agents.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We work around the clock to see best customer experience.

Pricing

Flexible Pricing

Our prces are pocket friendly and you can do partial payments. When that is not enough, we have a free enquiry service.

Communication

Admission help & Client-Writer Contact

When you need to elaborate something further to your writer, we provide that button.

Deadlines

Paper Submission

We take deadlines seriously and our papers are submitted ahead of time. We are happy to assist you in case of any adjustments needed.

Reviews

Customer Feedback

Your feedback, good or bad is of great concern to us and we take it very seriously. We are, therefore, constantly adjusting our policies to ensure best customer/writer experience.