A comparative balance sheet for the Beneteau Corporation is presented below
BENETEAU CORPORATION
Comparative Balance Sheet
2014 2013
Assets
Cash $ 37,000 $ 31,000
Accounts receivable (net) 80,000 60,000
Prepaid insurance 22,000 17,000
Land 18,000 40,000
Equipment 70,000 60,000
Accumulated depreciation (20,000) (13,000)
Total Assets $207,000 $195,000
Liabilities and Stockholders’ Equity
Accounts payable $ 12,000 $ 6,000
Bonds payable 27,000 19,000
Common stock 140,000 115,000
Retained earnings 28,000 55,000
Total liabilities and stockholders’ equity $207,000 $195,000
Additional information:
1. Net loss for 2014 is $12,000. Net sales for 2014 are $250,000.
2. Cash dividends of $15,000 were declared and paid in 2014.
3. Land was sold for cash at a loss of $2,000. This was the only land transaction during the
year.
4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for
$5,000 cash.
5. $12,000 of bonds were retired during the year at carrying (book) value.
6. Equipment was acquired for common stock. The fair value of the stock at the time of the
exchange was $25,000.
Instructions
1. Prepare a statement of cash flows for the year ended 2014 using the indirect method.
2. Compute the following cash based ratios:
a. Current cash debt coverage
b. Cash debt coverage
FINANCIAL ACCOUNTING II – WINTER 2014 – FINAL EXAM
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5
Problem 2 (20 Points)
The following items were taken from the financial statements of Kramer Manufacturing, Inc., over a three-year
period:
Item 2015 2014 2013
Net Sales $226,000 $212,000 $200,000
Cost of Goods Sold 150,000 140,000 125,000
Gross Profit $ 76,000 $ 72,000 $ 75,000
Instructions
Using horizontal analysis and 2013 as the base year, compute the trend percentages for net
sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or
unfavorable for each item.
Problem 3 (20 Points)
The following items were taken from the financial statements of Mint, Inc., over a three-year
period:
Item 2015 2014 2013
Net Sales $355,000 $336,000 $300,000
Cost of Goods Sold 214,000 206,000 186,000
Gross Profit $141,000 $130,000 $114,000
Instructions
Compute the following for each of the above time periods.
a. The amount and percentage change from 2013 to 2014.
b. The amount and percentage change from 2014 to 2015.
Problem 4 (20 Points)
Using these data from the comparative balance sheet of Sunta Fe Spice Company, perform
horizontal analysis.
December 31, 2014 December 31, 2013
Accounts receivable $ 375,000 $ 300,000
Inventory 780,000 600,000
Total assets 3,220,000 2,800,000
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