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GERALDO CORPORATION Comparative Income Statements For Years Ended December 31, 2011 and 2010
	2011		2010
Sales	$	676,000		$	520,000
Cost of goods sold		405,600			312,000

Gross profit		270,400			208,000
Operating expenses		156,000			104,000

Net income	$	114,400		$	104,000

Express the above comparative income statements in common-size
percents.(Round
your answers to 1 decimal place. Omit the “%” sign in your
response.)

	2011		2010
Sales	100.0	%	100.0	%
Cost of goods sold

Gross profit
Operating expenses

Net income		%		%

The company’s
situation in the most recent year has:

	Remained unchanged
	Improved
	Worsened

	Common-Size Percents		Trend Percents

	2012	2011	2010		2012	2011	2010
Sales	100.0	%	100.0	%	100.0	%		104.5	%	103.3	%	100.0	%
Cost of goods sold	62.5		61.0		58.2			102.1		108.2		100.0
Total expenses	14.3		13.8		14.1			106.1		101.1		100.0

Determine net income
as a percent of sales for the following years.(Round your intermediate
calculations to 1 decimal place and final answers to 2 decimal places.
Omit the “%” sign in your response.)

Years	Net income
2010	%
2011	%
2012	%

Should the net
income increased, decreased, or remained unchanged in this three-year period.

	Remained unchanged
	Net income increased
	Net income decreased

Sanderson Companyâ€™s
year-end balance sheets follow.

At December 31		2012		2011		2010
Assets
Cash	$	28,553	$	33,376	$	33,390
Accounts receivable, net		80,297		57,251		46,355
Merchandise inventory		100,959		74,889		48,386
Prepaid expenses		8,922		8,761		3,939
Plant assets, net		260,428		238,791		215,630

Total assets	$	479,159	$	413,068	$	347,700

Liabilities and Equity
Accounts payable	$	115,731	$	68,412	$	46,814
Long-term notes payable secured by mortgages on plant assets		90,082		94,056		75,305
Common stock, $10 par value		162,500		162,500		162,500
Retained earnings		110,846		88,100		63,081

Total liabilities and equity	$	479,159	$	413,068	$	347,700

The companyâ€™s income
statements for the years ended December 31, 2012 and 2011, follow.

For Year Ended December 31	2012	2011
Sales			$	622,907			$	491,551
Cost of goods sold	$	379,973			$	319,508
Other operating expenses		193,101				124,362
Interest expense		10,589				11,306
Income taxes		8,098				7,373

Total costs and expenses				591,761				462,549

Net income			$	31,146			$	29,002

Earnings per share			$	1.92			$	1.78

Additional information
about the company follows.


Common stock market price, December 31, 2012	$32.00
Common stock market price, December 31, 2011	30.00
Annual cash dividends per share in 2012	0.26
Annual cash dividends per share in 2011	0.13

To help evaluate the
company’s profitability, compute the following ratios for 2012 and 2011:

(1)	Return on common stockholders’ equity.(Do not round intermediate calculations and round your final answers to 1 decimal place. Omit the “%” sign in your response.)


2012	%
2011	%

(2)	Price-earnings ratio on December 31.(Round your answers to 1 decimal place.)


2012
2011

(3)	Dividend yield.(Round your answers to 1 decimal place. Omit the “%” sign in your response.)


2012	%
2011	%

	2013	2012	2011	2010	2009
Sales	$ 582,382	$ 378,170	$ 297,772	$ 205,360	$ 151,000
Cost of goods sold	293,641	190,685	152,336	104,630	75,500
Accounts receivable	28,362	22,161	20,457	11,972	10,343

Compute trend percents
for the above accounts, using 2009 as the base year.(Round your answers to
the nearest whole percent. Omit the “%” sign in your response.)

	2013	2012	2011	2010	2009
Sales	%	%	%	%	100%
Cost of goods sold	%	%	%	%	100%
Accounts receivable	%	%	%	%	100%

Sanderson Companyâ€™s
year-end balance sheets follow.

At December 31		2012		2011		2010
Assets
Cash	$	27,330	$	32,598	$	32,951
Accounts receivable, net		82,443		58,187		44,378
Merchandise inventory		99,592		76,137		46,786
Prepaid expenses		8,891		8,386		3,772
Plant assets, net		254,414		232,166		208,313

Total assets	$	472,670	$	407,474	$	336,200

Liabilities and Equity
Accounts payable	$	116,518	$	70,240	$	43,491
Long-term notes payable secured by mortgages on plant assets		91,528		92,782		74,300
Common stock, $10 par value		162,500		162,500		162,500
Retained earnings		102,124		81,952		55,909

Total liabilities and equity	$	472,670	$	407,474	$	336,200

(1)	Compute the current ratio for the year ended 2012, 2011, and 2010.(Round your answers to 2 decimal places.)


2012		to
2011		to
2010		to

(2)	Compute the acid-test ratio for the year ended 2012, 2011, and 2010.(Round your answers to 2 decimal places.)


2012		to
2011		to
2010		to

Selected comparative financial
statements of Bennington Company follow:

BENNINGTON COMPANY
Comparative Income Statements
For Years Ended December 31, 2012, 2011, and 2010
		2012		2011		2010
Sales	$	493,386	$	377,974	$	262,300
Cost of goods sold		297,018		237,368		167,872

Gross profit		196,368		140,606		94,428
Selling expenses		70,061		52,160		34,624
Administrative expenses		44,405		33,262		21,771

Total expenses		114,466		85,422		56,395

Income before taxes		81,902		55,184		38,033
Income taxes		15,234		11,313		7,721

Net income	$	66,668	$	43,871	$	30,312

BENNINGTON COMPANY
Comparative Balance Sheets
December 31, 2012, 2011, and 2010
		2012		2011		2010
Assets
Current assets	$	52,110	$	40,770	$	54,499
Long-term investments		0		600		3,030
Plant assets, net		96,775		103,203		62,250

Total assets	$	148,885	$	144,573	$	119,779

Liabilities and Equity
Current liabilities	$	21,737	$	21,541	$	20,961
Common stock		72,000		72,000		54,000
Other paid-in capital		9,000		9,000		6,000
Retained earnings		46,148		42,032		38,818

Total liabilities and equity	$	148,885	$	144,573	$	119,779

value:
10.00 points

Problem 13-1A Part 1

Required:
1.	Compute each year’s current ratio. (Round your answers to 1 decimal place.)


Current ratio	December 31, 2012:	to
Current ratio	December 31, 2011:	to
Current ratio	December 31, 2010:	to

value:
10.00 points

Problem 13-1A Part 2

2.	Express the income statement data in common-size percents. (Round your answers to 2 decimal places. Omit the “%” sign in your response.)

BENNINGTON COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2012, 2011, and 2010
	2012	2011	2010
Sales	%	%	%
Cost of goods sold

Gross profit
Selling expenses
Administrative expenses

Total expenses

Income before taxes
Income taxes

Net income	%	%	%

value:
10.00 points

Problem 13-1A Part 3

3.	Express the balance sheet data in trend percents with 2010 as the base year. (Round your answers to 2 decimal places. Leave no cells blank – be certain to enter “0” wherever required. Omit the “%” sign in your response.)

BENNINGTON COMPANY Balance Sheet Data in Trend Percents December 31, 2012, 2011, and 2010
	2012	2011	2010
Assets
Current assets	%	%	%
Long-term investments
Plant assets

Total assets

Liabilities and Equity
Current liabilities	%	%	%
Common stock
Other contributed capital
Retained earnings

Total liabilities and equity

Park Corporation began
the month of May with $700,000 of current assets, a current ratio of 2.30:1,
and an acid-test ratio of 1.20:1. During the month, it completed the
following transactions (the company uses a perpetual inventory system).

May	2	Purchased $55,000 of merchandise inventory on credit.
	8	Sold merchandise inventory that cost $50,000 for $150,000 cash.
	10	Collected $29,000 cash on an account receivable.
	15	Paid $24,000 cash to settle an account payable.
	17	Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
	22	Declared a $1 per share cash dividend on its 70,000 shares of outstanding common stock.
	26	Paid the dividend declared on May 22.
	27	Borrowed $85,000 cash by giving the bank a 30-day, 10% note.
	28	Borrowed $115,000 cash by signing a long-term secured note.
	29	Used the $200,000 cash proceeds from the notes to buy new machinery.

Required:

Prepare a table
showing Parkâ€™s (1) current ratio, (2) acid-test ratio, and (3) working
capital, after each transaction.(Do not round intermediate calculations. Round
your ratios to 2 decimal places and the working capitals to nearest dollar
amount. Omit the “$” sign in your response.)

Transaction	Current Ratio	Acid-Test Ratio	Working Capital
Beginning			$
May 2
May 8
May 10
May 15
May 17
May 22
May 26
May 27
May 28
May 29			$

10.

Selected year-end
financial statements of McCord Corporation follow. (All sales were on credit;
selected balance sheet amounts at December 31, 2010, were inventory, $51,900;
total assets, $219,400; common stock, $95,000; and retained earnings,
$52,948.)

McCORD CORPORATION Income Statement For Year Ended December 31, 2011
Sales	$	451,600
Cost of goods sold		297,650

Gross profit		153,950
Operating expenses		98,800
Interest expense		3,900

Income before taxes		51,250
Income taxes		20,646

Net income	$	30,604

McCORD CORPORATION Balance Sheet December 31, 2011
Assets			Liabilities and Equity
Cash	$	10,000	Accounts payable	$	21,500
Short-term investments		8,200	Accrued wages payable		2,800
Accounts receivable, net		31,400	Income taxes payable		4,400
Notes receivable (trade)*		3,500	Long-term note payable, secured
Merchandise inventory		38,150	by mortgage on plant assets		63,400
Prepaid expenses		2,600	Common stock		95,000
Plant assets, net		151,300	Retained earnings		58,050

Total assets	$	245,150	Total liabilities and equity	$	245,150

* These are short-term
notes receivable arising from customer (trade) sales.

Required:

Compute the
following.(Use 365 days a year. Do not round intermediate calculations and
round your final answers to 1 decimal place. Omit the “%” sign in your
response):


(1)	Current ratio	to
(2)	Acid-test ratio	to
(3)	Days’ sales uncollected	days
(4)	Inventory turnover	times
(5)	Days’ sales in inventory	days
(6)	Debt-to-equity ratio	to
(7)	Times interest earned	times
(8)	Profit margin ratio	%
(9)	Total asset turnover	times
(10)	Return on total assets	%
(11)	Return on common stockholders’ equity	%

14.

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