APPENDIX B • WORKED-OUT SOLUTIONS B-35
Sweets & Treats Candy Company, Inc.
Comparative Income Statement
For the years ended December 31, 2015 and 2016
Increase (Decrease)
2016 2015 Amount Percent
Revenue
Gross Sales $2,125,000 $2,249,000 ($124,000) (5.5)%
Less: Sales Returns and Allowances 126,400 143,500 (17,100) (11.9)
Sales Discounts
73,380
54,290
19,090
35.2
Operating Expenses
Salaries 340,900 319,800 21,100 7.0
Rent 215,000 213,100 1,900 .9
Depreciation 56,300 51,200 5,100 10.0
Utilities 29,690 35,660 (5,970) (16.7)
44,530
38,450
$
160,360
$
187,310
$
(26,950)
15b.
Comcast Corporation
Consolidated Statement of Income
Increase (Decrease)
Year ended December 31 (in millions) 2013 2012 Amount Percent
Revenue $64,657 $62,570 $2,087 3.3%
Costs and Expenses:
Programming and Production 19,670 19,929 (259) (1.3)
51,094 50,391 703 1.4
Operating Income 13,563 12,179 1,384 11.4
Other Income (Expense):
Interest Expense (2,574) (2,521) (53) 2.1
10%
16a.
85461_appB_hr_B1-B48_6.indd 35 9/23/15 4:26 PM
11,320
B-36 APPENDIX B • WORKED-OUT SOLUTIONS
Comcast Corporation
Costs and Expenses
December 31, 2013
Costs and Expenses
Programming and Production $19,670 38.5%
16b.
5a.
5b.
Assessment Test
Uniflex Fabricators, Inc.
Balance Sheet
As of December 31, 2014
Assets Percent
Current Assets $ 132,500 52.2%
Property, Plant, and Equipment 88,760 35.0
Uniflex Fabricators, Inc.
Comparative Balance Sheet
As of December 31, 2014 and 2015
Increase (Decrease)
Assets 2015 2014 Amount Percent
Current Assets $154,300 $132,500 $21,800 16.5%
Property, Plant, and Equipment 124,650 88,760 35,890 40.4
85461_appB_hr_B1-B48_6.indd 36 9/23/15 4:26 PM
APPENDIX B • WORKED-OUT SOLUTIONS B-37
Sticks & Stones Builder’s Mart
Balance Sheet
October 31, 2014
Assets
Current Assets Percent*
Cash $ 45,260 4.1%
Accounts Receivable 267,580 24.5
Merchandise Inventory 213,200 19.5
Prepaid Expenses 13,400 1.2
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable $ 43,200 3.9%
Salaries Payable 16,500 1.5
Notes Payable (6 months)
102,400
9.4
6a.
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B-38 APPENDIX B • WORKED-OUT SOLUTIONS
Sticks & Stones Builder’s Mart
Comparative Balance Sheet
October 31, 2014 and 2015
Increase (Decrease)
Assets 2015 2014 Amount Percent
Current Assets
Cash $ 47,870 $ 45,260 $ 2,610 5.8%
Accounts Receivable 251,400 267,580 (16,180) (6.0)
Merchandise Inventory 223,290 213,200 10,090 4.7
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable $ 48,700 $ 43,200 $ 5,500 11.3
Salaries Payable 9,780 16,500 (6,720) (40.7)
Notes Payable (6 months)
96,700
102,400
(5,700)
(5.6)
190,000
200,000
189,540
185,670
3,870
639,540
607,670
6b.
9a. Woof & Meow Pet Supply
Income Statement
Third Quarter, 2015
Revenue
Gross Sales $224,400 106.8%
Less: Sales Returns and Allowances
14,300
6.8
Net Sales 210,100 100.0
Cost of Goods Sold
Merchandise Inventory, July 1 165,000 78.5
76,500
85461_appB_hr_B1-B48_6.indd 38 9/23/15 4:26 PM
1,130
APPENDIX B • WORKED-OUT SOLUTIONS B-39
Woof & Meow Pet Supply
Comparative Income Statement
Third and Fourth Quarter 2015
Increase (Decrease)
4th Quarter 3rd Quarter Amount Percent
Revenue
Gross Sales $218,200 $224,400 $ (6,200) (2.8)%
Less: Sales Returns and Allowances
9,500
14,300
(4,800)
(33.6)
Net Sales 208,700 210,100 1,400 .7
Cost of Goods Sold
9b.
Jazzline Jewelers
Income Statement
For the year ended December 31, 2013
Revenue
Gross Sales $1,243,000 108.5%
Less: Sales Returns and Allowances 76,540 6.7
Sales Discounts
21,300
1.9
413,200
Operating Expenses
Salaries 92,350 8.1
Rent 83,100 7.3
Depreciation 87,700 7.7
Utilities 21,350 1.9
18,580
10a.
81,200
76,500
4,700
77,300
68,600
B-40 APPENDIX B • WORKED-OUT SOLUTIONS
Jazzline Jewelers
Comparative Income Statement
For the years ended December 31, 2013 and 2014
Increase (Decrease)
2014 2013 Amount Percent
Revenue
Gross Sales $1,286,500 $1,243,000 $43,500 3.5%
Less: Sales Returns and Allowances 78,950 76,540 2,410 3.1
Sales Discounts
18,700
21,300
(2,600)
(12.2)
Gross Margin 573,380 582,500 (9,120) 1.6
Operating Expenses
Salaries 99,340 92,350 6,990 7.6
Rent 85,600 83,100 2,500 3.0
Depreciation 81,200 87,700 (6,500) (7.4)
(4,670)
$
38,930
$
35,160
$
3,770
Netflix, Inc.
Vertical Analysis
(in thousands)
Twelve Months Ended
December 31, 2013
Revenues 100%
Cost of Revenues 70.5
Marketing 11.5
Technology and Development 8.7
10b.
24.
85461_appB_hr_B1-B48_6.indd 40 9/23/15 4:27 PM
(11,990)
APPENDIX B • WORKED-OUT SOLUTIONS B-41
Chapter 16: Inventory
Assessment Test
14a.
Date
Number of
Units
Price per
Unit
Total
Cost
Beginning inventory, January 1 10,000 5.00 50,000
Purchase, April 15 15,000 6.00 90,000
Purchase, July 19 20,000 7.00 140,000
Chapter 17: Depreciation
5. End of
Year
Original
Cost
Cost Recovered
% Depreciation
Accum.
Depreciation
Book
Value
$2,400,000
1 $2,400,000 14.29 $342,960 $ 342,960 2,057,040
2 2,400,000 24.49 587,760 930,720 1,469,280
Chapter 18: Taxes
15. Section D 175,800.00 × .28 − 9,414.00 = $39,810.00
16. Section B 121,430.00 × .25 − 8,287.50 = $22,070.00
16
SECTION II
17
18
SECTION III
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B-42 APPENDIX B • WORKED-OUT SOLUTIONS
1.
Face value
$5,000
Male-24
Number of 1,000s =5,000
Whole life annual premium =15.90 ×5
=
5
9. Nonforfeiture options:
Face value $50,000 10 years in force, Whole life
Number of 1,000s = 50
SECTION II
2. Building value $88,000, Contents value $21,000
Area 4, Class B
9. Annual premium $450 after 3 months by
insurance company
Premium =450.00 ×
3
12
=$112.50
Refund due =450.00 −112.50
R
11. Annual premium $1,280 after 9 months by insured
Short-rate premium =1,280 ×85% =$1,088.00
=$75,000
23. Aetna:
300,000
500,000 =60%
.6 ×95,000 =$57,000
Assessment Test
1. M-29, Face value
$80,000
, 20 payment life
Number of 1,000s
80,000
1,000
=80
Annual premium =31.52 ×80
O
5. Nonforfeiture options:
Face value
$130,000
15 years in force, Whole life
Number of 1,000s
130,000
1,000
=130
APPENDIX B • WORKED-OUT SOLUTIONS B-43
6. Face value
$60,000
5 years in force,
20
payment life
N
umber of 1,000s
60,000
=60
10.
N
umber of 100s, Building
47,000
100 =470
B
uilding premium 470 ×.76 =$357.20
13.
S
hort-term premium =260.00 ×
8
A
3
21.
Bodily injury 50/100 99.00
P
roperty damage 25 74.00
22.
Bodily injury 10/20 61.00
P
roperty damage 5 46.00
23.
Bodily injury 100/300 122.00
P
roperty damage 100 84.00
Chapter 20: Investments
2. Common dividend per share =
3,000,000
5,000,000
=.6 =$.60 per shar
e
3.
Total preferred dividend =3,000,000 ×5.50 =$16,500,000
10,000,000
20
SECTION I
14.
C
urrent yield =
Annual dividend
Current price
=1.60
46.13 =.0346 =3.5
%
P
rice-earnings ratio =Current price per shar
e
Earnings per share
=46.13
6.59
=7
16. Earnings per share =
Current price
PE ratio =
27.5
21 =$1.31
Current yield =Annual dividend
Current price =.45
27.50 =1.6%
17. Current price =
Dividend
Yield =
1.60
2.5% =$64
Price-earnings ratio =Current price per share
Earnings per share =64.00
4.92 =13
85461_appB_hr_B1-B48_7.indd 43 9/23/15 6:57 PM
B-44 APPENDIX B • WORKED-OUT SOLUTIONS
19. Cost of shares = Price per share × Number of shares = 19.60 × 200 = $3,920.00
Broker’s Commission = Cost of shares × Commission rate = 3,920.00 × .01 = $39.20
20.
Cost of shares =100 ×47.20 =$4,720.00
C
ommission =100 ×47.20 ×3% = +141.6
0
Total cost =$4,861.60
Value of shares =100 ×56.06 =$5,606.00
6
Value of shares =775 ×34.50 =$26,737.50
21.
Cost of shares =350 ×18.42 =$6,447.00
C
ommission =300 ×18.42 ×2% = + 110.5
2
=50 ×18.42 ×3% = + 27.6
3
Value of shares =350 ×29.19 =$10,216.50
C
Value of shares =500 ×28.86 =$14,430.00
22.
Cost of shares =900 ×28.37 =$25,533.00
C
ommission =900 ×28.37 ×3% = + 765.99
Total cost =$26,298.99
Value of shares =900 ×36.25 =$32,625.00
23.
Cost of shares =775 ×37.75 =$29,256.25
C
ommission =700 ×37.75 ×1.5% = + 396.38
=75 ×37.75 ×2.5% = + 70.78
Gain 1loss2=$26,310.50 −29,723.41 =($3,412.85)
24.
Cost of shares =500 ×25.11 =$12,555.00
11. Accrued interest =1,000 ×.055 ×
2
12
=$9.1
7
Price per bond =Current market price +Accrued interest +Commission =862.50 +9.17 +5.00 =$876.67
Total purchase price =Price per bond ×Number of bonds =876.67 ×1=$876.67
Proceeds per bond =Current market price +Accrued interest −Commission =915.00 +3.65 −6.00 =$912.65
Total proceeds =Proceeds per bond ×Number of bonds sold =912.65 ×10 =$9,126.50
Annual interest =Par value ×Coupon rate =1,000 ×.06625 =$66.25
SECTION II
SECTION III
11.
Mutual fund sales charge =Offer price −Net asset value =18.25 −17.58 =$.67
12.
Mutual fund sales charge =Offer price −Net asset value
Sales charge =13.35 −12.82 =$.53
12.82
APPENDIX B • WORKED-OUT SOLUTIONS B-45
13.
Mutual fund sales charge =Offer price −Net asset value =15.44 −15.44 =0
Sales charge % =
Sales charge
Net asset value
=
0
15.44
=0
%
16.
N
et asset value =
Total assets −Total liabilities
Number of shares outstanding
=
25,000,000 −6,300,000
2,000,000
=$9.3
5
Shares purchased =
Total investment
Offer price
=
8,000
9.92
=806.452
17.
N
et asset value =
Total assets −Total liabilities
Number of shares outstanding =
52,000,000 −1,800,000
6,100,000 =$8.2
3
Total investment
5,000
N
Total assets −Total liabilities
Number of shares outstanding
95,400,000 −4,650,000
Total investment
50,000
5
19.
N
et asset value =
Total assets −Total liabilities
Number of shares outstanding
=
15,000,000 −750,000
1,300,000
=$10.9
6
Shares purchased =
Total investment
Offer price =
25,000
10.96 =2,281.02
2
20.
N
et asset value =
Total assets −Total liabilities
Number of shares outstanding
Proceeds on sale =300 ×14.20 =$4,260.00
Total gain or 1loss 2=4,260.00 −3,750.00 +(300 ×.25) =$585.00
R
Total gain 1loss 2
Total cost of purchase =500 ×10.40 =$5,200.00
Proceeds on sale =500 ×12.90 =$6,450.00
Total gain or 1loss 2=6,450.00 −5,200.00 +(500 ×.68) =$1,590.00
R
Total gain 1loss 2
1,590.00
Total gain 1loss 2
(1,540.00)
Total cost of purchase
Total cost =100 ×15.30 =$1,530.00
Total gain =$395.00
11.
16.
21.
Total cost of purchase =300 ×12.50 =$3,750.00
Total cost of purchase
5,200.00
23.
Total cost of purchase =1,000 ×4.85 =$4,850.00
Proceeds on sale =1,000 ×6.12 =$6,120.00
Total gain or 1loss 2=6,120.00 −4,850.00 +(1,000 ×1.25) =$2,520.00
Return on investment =
Total gain 1loss 2
Total cost of purchase =
2,520.00
4,850.00 =52%
25.
Gain 1or loss2 on investment =Proceeds −Total cost
85461_appB_hr_B1-B48_7.indd 45 9/23/15 6:57 PM
Mutual fund sales charge =Offer price −Net asset value =26.97 −25.69 =$1.28
Mutual fund sales charge =Offer price −Net asset value =13.64 −13.09 =$.55
Sales charge
Net asset value
B-46 APPENDIX B • WORKED-OUT SOLUTIONS
Assessment Test
1. Common dividend =
Dividend
Shares
=
7,900,000
22,00,000
=.359 =$.36 per shar
e
2.
Preferred dividend =3.20 current +3.20 arrears =$6.40 per share
Total preferred =1,000,000 ×6.40 =$6,400,000
9. Earnings per share =
Price
PE ratio
=
33.50
16
=$2.0
9
Current yield =
Dividend
Price
=
1.12
33.50
=3.3
%
10.
C
urrent price =
Dividend
Yield
=
.48
1.2%
=$40.00
P
rice-earnings ratio =
Price
Earnings =
40.00
2.10 =19
11.
Dividend =Price ×Yield =89.75 ×1.9% =$1.71
E
arnings per share =
Price
PE ratio
=
89.75
10
=$8.98
12.
Cost of shares =400 ×39.25 =$15,700
C
ommission =400 ×39.25 ×2% = + 314
Total cost $16,01
4
Value of shares =400 ×44.75
2
Value of shares =630 ×19.88
13.
Cost of shares
=630 ×24.13
= $15,201.90
C
ommission =600 ×24.13 ×3%
= 434.34
30 ×24.13 ×4%
= +28.9
6
14.
Cost of shares =Price per share ×Number of shares =61.50 ×200 =$12,300.00
Broker’s commission =Cost of shares ×Commission rate =12,300.00 ×.02 =$246.00
Total cost =Cost of shares +Broker’s commission =12,300.00 +246.00 =$12,546.00
Value of shares =Price per share ×Number of shares =71.25 ×200 =$14,250.00
Broker’s commission =Cost of shares ×Commission rate =14,250.00 ×.02 =$285.00
15.
Cost of shares =Price per share ×Number of shares =45.50 ×850 =$38,675.00
Commission =Cost of shares ×Commission rate =800 ×45.50 ×.015 =$546.00
Commission =Cost of shares ×Commission rate =50 ×45.50 ×.025 =$56.88
Total commission =546.00 +56.88 =$602.88
Total cost =Cost of shares +Broker’s commission =38,675.00 +602.88 =$39,277.88
Value of shares =Price per share ×Number of shares =53.75 ×850 =$45,687.50
Commission =Cost of shares ×Commission rate =800 ×53.75 ×.015 =$645.00
Commission =Cost of shares ×Commission rate =50 ×53.75 ×.025 =$67.19
Total commission =645.00 +67.19 =$712.19
Total common =8,500,000 −6,400,000 =$2,100,000
Price
APPENDIX B • WORKED-OUT SOLUTIONS B-47
26.
I
nterest =1,000 ×.0825 ×
65
360
=$14.9
0
Total cost =(953.75 +14.90 +5.00) ×10 =$9,736.50
30.
I
nterest =1,000 ×.08875 ×
4
12
=$29.5
8
Proceeds =(1,092.50 +29.58 −5.00) ×20 =$22,341.60
Current yield =
1,057.50
=9%
41.
N
et asset value =
Total assets −Total liabilities
Number of shares outstanding
=
30,000,000 −1,800,000
4,000,000
=$7.0
5
Shares purchased =
Total investment
Offer price
=
50,000
7.80
=6,410.25
6
7,100,000
BUSINESS MATH JOURNAL
Issues and Activities – Solutions
BusinessMath Journal – Page 90
1a.
Doctoral degree 1,551 ×52 =$80,652
P
rofessional degree 1,665 ×52 =$86,580
S
H
L
APPENDIX B
1b.
Bachelor’s degree $54,756
A
ssociate’s degree −$39,936
$2,548 Difference
BusinessMath Journal – Page 190
1.
Paper .37 ×750, 000 =277,500 Pounds
Yard waste .18 ×750, 000 =135,000 Pounds
2.
365 days
×24 hours per day
8,760 hours per year
8,760
4
=2,190 Bottles or jars
3.
7 days
4,000,000 plastic bottles
1,000,000 plastic bottles
I
Total cost =(785.00 +20.49 +9.50) ×5=$4,074.95
I
12
6
Total cost =(1,057.50 +14.06 +7.00) ×15 =$16,178.40
I
5
I
85
360
4
Proceeds =(980.00 +21.84 −8.00) ×5=$4,969.20
Annual interest =1,000 ×.05375 =$53.75
Annual interest =1,000 ×9.5% =$95.00
B-48 APPENDIX B • WORKED-OUT SOLUTIONS
BusinessMath Journal – Page 306
1a.
2010 had the greatest increase, 11.4%
2
010
172.9 −155.2
155.2 =
.1140 =11.4% Increas
e
1b.
B
=
P
R
=
248.7
.08
=3,108.75 =$3.11 Trillion, estimated retain sale
s
33.0 −1.3
BusinessMath Journal – Page 408
1a.
Housing P=R×B=.34 ×$55,000 =$18,700
T
ransportation P=R×B=.18 ×$55,000 =$9,90
0
F
ood P=R×B=.12 ×$55,000 =$6,60
E
O
0
1b. Students should multiply their annual earnings (if any) by the category rates.
2a.
.2 ×64,000 =$12,800 Ideal savings
2b.
.3 ×64,000 =$19,200 Debt limit
BusinessMath Journal – Page 537
1. The number of identity thefts in 2011 was
13%
greater than in 2010.
Let X=number of identity thefts in 2010
G
2. Identit.y theft victims:
Credit card fraud .26 ×11,600,000 =3,016,000
BusinessMath Journal – Page 644
Answers will be based on current research figures.
BusinessMath Journal – Page 767
2000 Census
113.8%
85461_appB_hr_B1-B48_7.indd 48 9/23/15 6:57 PM