Instructions:
1) Write all of your answers on the examination paper. If you need additional space, use the back of the page facing the question and clearly identify the question being answered. 2) This is a closed book exam. One single-sided 8.5’x11’aid sheet containing formulas/notes is permitted. Non-programmable calculators are permitted. 3) Pencil or pen may be used. However, papers written in pencil or papers with white outs will not be re-marked. Please remain in your seats during the last 15 minutes of the exam period so you do not disturb others.
Question 1 (10 marks)
a) (5 marks) Using the table below, classify the following items as Assets, Liabilities or Shareholders’ Equity: Common Shares $10 million; Accounts Receivable $2 million; Unearned Revenue $5 million; Goodwill $4 million; Income Tax Payable $6 million; Investments $1 million; Bank Advances $15 million; Preferred Shares $5 million; Retained Earnings $3 million; Property Plant & Equipment $7 million
Y&Co. Consolidated Balance Sheet – 2010
Assets
Liabilities
Shareholders’ Equity
b) (3 marks) Assume the Total Assets of the company equal $23 million. Using the information provided in part a), what are the Total Liabilities of Y&CO?
c) (2 marks) What would you expect to find under Long Term Investments for Y&CO?
Question 2 (15 marks)
a) (5 marks) Using the information provided for Ford Motor Company, conduct a vertical analysis of the company’s Cost of Sales and Selling, administrative & Other Expenses using Sales as the base amount for 2009 and 2010.
The Essay on Assets, liabilities, equity
Accounting, per se, is based on five types of accounts namely: assets, liabilities, equity, income and expense. These account types belong either of the Balance sheet accounts or Income and Expense accounts. Assets, liabiliites, and equity fall under the balance sheet account and the rest goes to the income and expense accoutnts. Definining each, asset is composed of a group of things that an ...
b) (5 marks) Using the information provided for Daimler, conduct a vertical analysis of the company’s Costs of Sales and Selling, General & Administrative Expenses using Revenue as the base amount for 2009 and 2010.
Question 2 (15 marks)
c) (5 marks) Comparing your results from part a) and part b), what can you conclude regarding expense management at Ford versus Daimler? Please do not exceed 4-5 lines in your answer!
Question 3 (35 marks)
Appendix 1 contains the 2007 Balance Sheet, Income Statement and Statement of Cash Flows for General Motors Corporation. Please fill out the table below using the financial statements provided. Please note that you can detach (“rip out”) Appendix 1 for easier analysis.
a) (24 marks) Calculate the following ratios for 2007:
From the Selected General Motors Financial Statements
2007
2006
Debt to Total Assets = Total Liabilities/Total Assets
Times Interest Earned = EBIT/Interest Expense
Cash to Total Debt Coverage= Cash provided by Operating Activities/Average Total Liabilities
Cash to Total Debt Coverage: Cash provided by Operating Activities/Average Current Liabilities
Working Capital = Current Assets – Current Liabilities
Current Ratio= Current Assets/Current Liabilities
b) (5 marks) Using the ratios calculated in part a) comment on General Motors’ liquidity in 2007 as compared to 2006. Please identify the ratios that you are using as a reference. Do not exceed 4-5 sentences in your answer!
c) (5 marks) Using the ratios calculated in part a) comment on General Motors’ solvency in 2007 as compared to 2006. Please identify the ratios that you are using as a reference. Do not exceed 4-5 sentences in your answer!
d) (1 mark) What, in your opinion, happened to General Motors in 2008? Base your opinion on your previous work.
Question 4 (18 marks)
KG Spring Skating School had the following account balances as at June 30, 2011: Cash $23,000; Equipment $2,000; Accounts Payable $500; Advanced Registration Fees $17,500; Common Shares $1,000; and Retained Earnings $6,000. The following events occurred during the month of July: July
The Essay on BCG Matrix Analysis On General Mills Canada
General Mills is a company that has many brands in the food industry, however, they are more famously known for their individual brands. Their primary brands include Cheerios, Nature Valley, Pillsbury, Green Giant, Old El Paso, Hamburger Helper, Betty Crocker and Yoplait (General Mills Canada). When these brands are organized into different categories, General Mills’ product mix is the result. ...
Registration fees received for July skating school (four week skating lessons), $5,500. July 4Paid for ice time for the month of July, $14,400.
July 9Paid accounts payable outstanding at June 30th.
July 11Booked ice with the city for the September session. It will cost $14,400. No money was paid. July 11Received and paid a bill for $500 for advertising of the July skating school. July 21 Received a bill for internet services for $100. The bill is not due until August 15th. July 29Last day of July session.
July 29Received advanced registrations for the next four-week skating session in September, $2,200. July 30Purchased refreshments, gifts and supplies for end-of-school test day and ribbons for skaters, $500. July 31Paid coaches and assistant coaches, $1,200.
a) Prepare journal entries for each of the above transactions in May using the table format below. If you need to make any assumptions, please state them clearly.
b) Prepare a Balance Sheet as at July 31, 2011. (8 marks)
Question 5 (15 marks)
a) Penguins Inc. reported net earnings of $775,000 for the year ended September 30, 2011. During the year, depreciation expense was $200,000 and amortization expense was $60,000. An analysis of the year end balance sheets revealed the following: accounts receivable decreased by $350,000, prepaid expenses increased by $95,000, accounts payable decreased by $280,000, income tax payable increased by $5,000 and the company realized a $10,000 gain on the sale of equipment. Calculate the cash provided (used) by operating activities using the indirect method. (8 marks)
b) Assume that the total change in cash and cash equivalents for the year was $470,000. Explain how this is possible given you analysis in Part A of this question (Provide specific examples).
(4 marks)
c) What is the main purpose of the cash flow statement? (3 marks)
Question 6 (7 marks)
Sun Protection Inc. (“SPI”) manufactures and sells sunglasses. Price and cost data are as follows:
Selling price per pair of sunglasses $25.00
Variable costs per pair of sunglasses:
Raw materials $11.00
Direct labor 5.00
Manufacturing overhead 2.50
Selling expenses 1.30
$19.80
The Essay on University Costs Dollars Cost Year
University Costs How have university costs changed over the years? University costs have been steadily increasing throughout the last ten years as more and more students apply. However, foreign students feel the brunt of the hikes as they pay around the area of three times as much as in country students. What are some of the costs when going away to university? Costs that you are expected to cover ...
Annual fixed costs:
Manufacturing overhead $192,000
Selling and administrative 276,000
$468,000
Forecasted annual sales volume (120,000 pairs) $3,000,000
Income tax rate 40%
a) SPI estimates that its direct labor costs will increase 8 percent next year. How many units will SPI have to sell next year to reach breakeven? (3 marks)
b) If SPI’s direct labor costs do increase 8 percent, what selling price per unit of product must it charge to maintain the same contribution margin ratio? (4 marks)
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Appendix 1 – From General Motors 2007 Annual Report
Appendix 1 (cont’d) – From General Motors 2007 Annual Report
Appendix 1 (cont’d) – From General Motors 2007 Annual Report
