Financial Analysis Exercises and Questions Essay

Financial Analysis Exercises and Questions - Essay Example Practice 2-14 Expanded Accounting Equation Assets Liabilities Capital Stock Retained Earnings Case A $20,000 $ 8,000 $ 8,500 $ 3,500 Case B $16,000 $ 9,000 $ 5,000 2,000 Case C $57,000 11,000 14,000 32,000 Case D 46,000 30,000 20,000 ($4000) Exercise 2-6 Balance Sheet Preparation Simon Company Balance Sheet as on December 31, 2006 Assets Liabilities and Owners' Equity Cash $ 179,750 Liabilities Accounts receivable 123,000 Accounts payable $62,500 Supplies 3,750 Mortgage payable 479,500 Land 130,000 Building 418,500 Owners’ equity* 313,000 Total assets $855,000 Total liabilities and owners' equity $855,000 *Owners’ equity (01/01/06) $210,000 Less: Distributions to owners during 2006 $(21,750) Add: Net Income $124,750 Owners’ equity (12/31/06) $313,000 Exercise 2-8 Income Statement Preparation Beckstrom Corporation Income Statement For the Year Ended December 31, 2006 Revenues $ 384,000 Less: Expenses Advertising expense 15,000 Supplies expense 46,000 Rent expense 10,000 Utilities expense 3,000 Salaries expense 61,000 Miscellaneous expenses 4,400 Income before tax 244,600 Less: Tax (30%) 73,380 Net income $171,220 Exercise 2-9 Cash Flow Computations 1. Net cash flow provided (used) by operating activities Cash receipts from: Customers $270,000 Less: Cash payments for Wages Utilities Advertising Rent Taxes 82,000 3,000 4,000 36,000 67,000 Net cash flow provided (used) by operating activities $78,000