1. Week Five Assignment - Wiley Plus
Question 1
Exercise E13-1
Correct.
Pioneer Corporation had the transactions below during 2011.
Analyze the transactions and indicate whether each transaction resulted in a cash flow from operating
activities, investing activities, financing activities, or noncash investing and financing activities.
(a)
Issued $50,000 par value common stock
for cash.
Financing activities
(b)
Purchased a machine for $30,000, giving a
long-term note in exchange.
Noncash investing and financing activities
(c)
Issued $200,000 par value common stock
upon conversion of bonds having a face
value of $200,000.
Noncash investing and financing activities
(d)
Declared and paid a cash dividend of
$18,000.
Financing activities
(e)
Sold a long-term investment with a cost of
$15,000 for $15,000 cash.
Investing activities
(f) Collected $16,000 of accounts receivable. Operating activities
(g) Paid $18,000 on accounts payable. Operating activities
Question 2
Exercise E13-8
Correct.
Here are comparative balance sheets for Taguchi Company.
TAGUCHI COMPANY
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $73,000 $22,000
Accounts receivable 85,000 76,000

2. Inventories 170,000 189,000
Land 75,000 100,000
Equipment 260,000 200,000
Accumulated
depreciation
(66,000) (32,000)
Total $597,000 $555,000
Liabilities and Stockholders'
Equity
Accounts payable $39,000 $47,000
Bonds payable 150,000 200,000
Common stock ($1
par)
216,000 174,000
Retained earnings 192,000 134,000
Total $597,000 $555,000
Additional information:
1. Net income for 2011 was $103,000.
2. Cash dividends of $45,000 were declared and paid.
3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4. Common stock was issued for $42,000 cash.
5. No equipment was sold during 2011, but land was sold at cost.
Complete the statement of cash flows for 2011 using the indirect method. (List amounts from
largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14,
10, -17, -5, -1. If amount decreases cash flow, use either a negative sign preceding the
number e.g. -45 or parentheses e.g. (45).)
TAGUCHI COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flows from operating activities
Net income
$
103,000
Adjustments to reconcile net
income
to net cash provided by operating
activities
Depreciation expense $
34,000
Decrease in inventory
19,000
Increase in accounts receivable
(9,000)
Decrease in accounts payable
(8,000) 36,000
Net cash
provided
by
operating activities
139,000

3. Cash flows from investing activities
Sale of land
25,000
Purchase of equipment
(60,000)
Net cash
used
by
investing activities
(35,000)
Cash flows from financing activities
Issuance of common stock
42,000
Redemption of bonds
(50,000)
Payments of cash dividends
(45,000)
Net cash
used
by
financing activities
(53,000)
Net
increase
in cash
51,000
Cash at beginning of period 22,000
Cash at end of period $
73,000
Question 3
Exercise E14-1
Correct.
Financial information for Blevins Inc. is presented below.
December 31,
2012
December 31,
2011
Current assets $125,000 $100,000
Plant assets (net) 396,000 330,000
Current liabilities 91,000 70,000
Long-term
liabilities
133,000 95,000
Common stock,
$1 par
161,000 115,000
Retained earnings 136,000 150,000
Complete the schedule showing a horizontal analysis for 2012 using 2011 as the base year. (If
amount is a decrease, use either a negative sign preceding the number eg -45 or
parentheses eg (45). Round percentages to 1 decimal place, e.g. 10.5. List items in the
order given in the question.)

4. BLEVINS INC.
Condensed Balance Sheet
December 31
Increase or (Decrease)
2012 2011 Amount Percentage
Assets
Current assets
$
125,000
$
100,000
$
25,000 25.0
%
Plant assets (net) 396,000 330,000 66,000 20.0
%
Total assets $
521,000
$
430,000
$
91,000 21.2
%
Liabilities
Current liabilities
$
91,000
$
70,000
$
21,000 30.0
%
Long-term liabilities 133,000 95,000 38,000 40.0
%
Total liabilities
$
224,000
$
165,000
$
59,000 35.8
%
Stockholders' Equity
Common stock, $1 par
$
161,000
$
115,000
$
46,000 40.0
%
Retained earnings 136,000 150,000 (14,000) (9.3)
%
Total stockholders’
equity $
297,000
$
265,000
$
32,000 12.1
%
Total liabilities and
stockholders' equity $
521,000
$
430,000
$
91,000 21.2
%
Question 4
Problem P13-9A
Correct.
Condensed financial data of Arma Inc. follow.
ARMA INC.
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $90,800 $48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated
depreciation
(50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders'
Equity

5. Accounts payable $112,000 $67,300
Accrued expenses
payable
16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings 224,000 105,450
Total $682,500 $514,750
ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding
depreciation
12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $158,900
Additional information:
1. New plant assets costing $85,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year.
Complete the statement of cash flows using the indirect method. (List amounts from largest
positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -
17, -5, -1. If amount decreases cash flow, use either a negative sign preceding the number
e.g. -45 or parentheses e.g. (45).)
ARMA INC.
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flows from operating activities
Net income
$
158,900
Adjustments to reconcile net
income to net
cash provided by operating
activities
Depreciation expense
$
46,500
Increase in accounts payable 44,700

6. Loss on sale of plant assets 7,500
Increase in accounts receivable (59,800)
Increase in inventory (9,650)
Increase in prepaid expenses (2,400)
Decrease in accrued expenses payable (500) 26,350
Net cash
provided
by
operating activities
185,250
Cash flows from investing activities
Sale of plant assets 1,500
Purchase of plant assets (85,000)
Purchase of investments (24,000)
Net cash
used
by
investing activities
(107,500)
Cash flows from financing activities
Sale of common stock 45,000
Payment of cash dividends (40,350)
Redemption of bonds (40,000)

7. Net cash
used
by
financing activities
(35,350)
Net
increase
in cash
42,400
Cash at beginning of period 48,400
Cash at end of period $
90,800
Question 5
Problem P13-10A
Correct.
Condensed financial data of Arma Inc. follow.
ARMA INC.
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $90,800 $48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated
depreciation
(50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders'
Equity
Accounts payable $112,000 $67,300
Accrued expenses
payable
16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings 224,000 105,450
Total $682,500 $514,750
ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding
depreciation
12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $158,900

8. Additional information:
1. New plant assets costing $85,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year.
Further analysis reveals that accounts payable pertain to merchandise creditors.
Complete the statement of cash flows for Arma Inc. using the direct method. (List amounts from
largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14,
10, -17, -5, -1. If amount decreases cash flow for financing and investing activities, use
either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). List all other
amounts as positive.)
ARMA INC.
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flows from operating activities
Cash receipts from customers
$
332,980
Less cash payments
To suppliers $
100,410
For income taxes
27,280
For operating expenses
15,310
For interest
4,730 147,730
Net cash
provided
by
operating activities
185,250
Cash flows from investing activities
Sale of plant assets
1,500
Purchase of plant assets
(85,000)
Purchase of investments
(24,000)
Net cash
used
by
investing activities
(107,500)
Cash flows from financing activities

9. Sale of common stock
45,000
Payment of cash dividends
(40,350)
Redemption of bonds
(40,000)
Net cash
used
by
financing activities
(35,350)
Net
increase
in cash
42,400
Cash at beginning of period 48,400
Cash at end of period $
90,800
Question 6
Problem P14-2A
Correct.
The comparative statements of Villa Tool Company are presented below.
VILLA TOOL COMPANY
Income Statement
For the Year Ended December 31
2012 2011
Net sales $1,818,500 $1,750,500
Cost of goods sold 1,011,500 996,000
Gross profit 807,000 754,500
Selling and administrative
expense
516,000 479,000
Income from operations 291,000 275,500
Other expenses and losses
Interest expense 18,000 14,000
Income before income
taxes
273,000 261,500
Income tax expense 81,000 77,000
Net income $ 192,000 $ 184,500
VILLA TOOL COMPANY
Balance Sheets
December 31
Assets 2012 2011
Current assets
Cash $ 60,100 $ 64,200
Short-term investments 69,000 50,000
Accounts receivable
(net)
117,800 102,800

10. Inventory 123,000 115,500
Total current assets 369,900 332,500
Plant assets (net) 600,300 520,300
Total assets $970,200 $852,800
Liabilities and
Stockholders' Equity
Current liabilities
Accounts payable $160,000 $145,400
Income taxes payable 43,500 42,000
Total current
liabilities
203,500 187,400
Bonds payable 200,000 200,000
Total liabilities 403,500 387,400
Stockholders' equity
Common stock ($5 par) 280,000 300,000
Retained earnings 286,700 165,400
Total stockholders'
equity
566,700 465,400
Total liabilities and
stockholders' equity
$970,200 $852,800
Compute the following ratios for 2012. (Weighted average common shares in 2012 were 57,000,
and all sales were on account.) (Round earnings per share, current ratio and acid-test ratio
to 2 decimal places, e.g. 10.50. Round other answers to 1 decimal place, e.g. 10.5.)
(a) Earnings per share
$
3.37
(b)
Return on common
stockholders' equity
37.2
%
(c) Return on assets 21.1
%
(d) Current 1.82
:1
(e) Acid-test 1.21
:1
(f) Receivables turnover 16.5
times
(g) Inventory turnover 8.5
times
(h) Times interest earned 16.2
times
(i) Asset turnover 2.0
times
(j) Debt to total assets 41.6
%