Contemporary Mathematics for Business and Consumers, Eighth Edition
Robert Brechner and George Bergeman
Copyright © 2017 Cengage Learning
Level 1
Chapter 15 – Section I – Exercise 34a (Note: These Excel exercises include part a only.)
Use the following financial information to calculate the owner’s equity and pre-
pare a balance sheet with vertical analysis as of December 31, 2015, for Victory
Lane Sporting Goods, a sole proprietorship owned by Kyle Pressman: current assets,
$157,600; property, plant, and equipment, $42,000; investments and other assets,
$35,700; current liabilities, $21,200; long-term liabilities, $53,400.
Victory Lane Sporting Goods
Balance Sheet
December 31, 2015
Contemporary Mathematics for Business and Consumers, Eighth Edition
Robert Brechner and George Bergeman
Copyright © 2017 Cengage Learning
Level 2
Chapter 15 – Section I – Exercise 35a (Note: These Excel exercises include part a only.)
a. Use the following financial information to prepare a balance sheet with vertical analysis as of
June 30, 2015, for Stargate Industries, Inc.: cash, $44,300; accounts receivable, $127,600;
merchandise inventory, $88,100; prepaid maintenance, $4,100; office supplies, $4,000; land,
$154,000; building, $237,000; fixtures, $21,400; vehicles, $64,000; computers, $13,000; goodwill,
$20,000; investments, $32,000; accounts payable, $55,700; salaries payable, $23,200; notes
payable ( 6-month), $38,000; mortgage payable, $91,300; debenture bonds, $165,000; common
stock, $350,000; and retained earnings, $86,300.
Note: Round each answer to the nearest tenth percent. Use Excel’s Round function and round
your decimal results to 3 places in order to round the percents to tenths. * Percents may vary
by .1 due to rounding.
Stargate Industries, Inc.
Balance Sheet
June 30, 2015
Assets
Current Assets Percent*
Liabilities and Owner’s Equity
Current Liabilities
Accounts Payable $55,700 6.9%
Salaries Payable $23,200 2.9%
Notes Payable $38,000 4.7%
Total Current Liabilities $116,900 14.5%
Total Liabilities $373,200 46.1%
Owner’s Equity
Level 3
Chapter 15 – Section II – Exercise 4, 5, 6
Calculate the missing information based on the financial information below:
Exercise 4: Net sales are $334,500; cost of goods sold is $132,300, and oper-
ating expenses are 108,000. find gross margin and net profit.
Exercise 5: Net sales are $1,640,000, gross margin is $760,000, and oper-
ating expenses are $354,780. Find cost of goods sold and net profit.
Exercise 6: Cost of goods sold is $257,000, gross margin is $418,530, cost
of net profit is $84,370. Find the net sales and the operating expense.
Net Sales
Cost of
Goods Sold
Gross
Margin
Operating
Expenses
Net Profit
Level 2
Chapter 15 – Section II – Exercise 12
For the third quarter, Micro Tech had gross sales of $315,450; sales returns and
allowances of $23,100; and sales discounts of $18,700. What were the net sales?
Level 1
Chapter 15 – Section III – Exercise 2
Calculate the amount of working capital and the current ratio for Impact Builders, Inc.
The company has current assets of $125,490; and current liabilities of $74,330.
Level 3
Chapter 15 – Section III – Exercise 5
Calculate the amount of working capital and the current ratio for Shutterbug Cameras, Inc.
The company: has current assets of $1,224,500; and current liabilities of $845,430
Shutterbug Cameras, Inc.
Level 3
Chapter 15 – Section III – Exercise 7
Calculate the quick assets and acid test ratio for Impact Builders, Inc. The company has
cash, $12,320; marketable securities, $30,000; and accounts receivable, $53,600.
NOTE: Use the current liabilities you were given in exercise 1 of this section.
Company: Impact Builders, Inc.
Level 2
Chapter 15 – Section III – Exercise 10
Calculate the quick assets and acid test ratio for Shutterbug Cameras, Inc. The company has
cash, $24,400; marketable securities, $140,000; and accounts receivable, $750,300.
NOTE: Use the current liabilities you were given in exercise 4 of this section.
Company: Shutterbug Cameras, Inc.
Level 2
Chapter 15 – Section III – Exercise 17
Calculate the average inventory and inventory turnover ratio for Certified Fabrics company.
Certified has beginning inventory of $121,400; ending inventory of $89,900; and cost
of goods sold of $659,000.
Company: Certified Fabrics
Level 3
Chapter 15 – Section III – Exercise 24
Calculate the amount of owner’s equity, the debt-to-assets ratio, and
the debt-to-equity ratio for Café Europa which has total assets
of $2,875,000 and total liabilities of $2,189,100.
Company: Gateway Imports
Copyright © 2017 Cengage Learning
Level 2
Chapter 15 – Section III – Exercise 28
Calculate the gross and net profits and the two profit margins for the Dynamic Optical.
Dynamic Optical has provided the following figures: net sales, $316,735; cost of goods
sold, $203,655; and operating expenses, $85,921.
Company: Dynamic Optical
Level 3
Chapter 15 – Section III – Exercise 32
Dynamic Optical has owner’s equity of $397,000 and net profit of $27,159.
What is the percent return on investment for Dynamic?
Level 2
Chapter 15 – Section III – Exercise 33
Prepare a trend analysis chart from the following financial data for the Hook, Line
and Sinker Fishing Supply Company.
Trend Analysis Chart (%)
Hook, Line and Sinker Fishing Supply Company
5-year Selected Financial Data
Hook, Line and Sinker Fishing Supply Company
Level 2
Chapter 15 – Assessment Test – Exercise 6a
Use the following financial information to prepare a balance sheet with vertical analysis as
of October 31, 2014, for Sticks & Stones Builder’s Mart: cash, $45,260; accounts receivable, $267,580;
merchandise inventory, $213,200; prepaid expenses, $13,400; supplies, $5,300; land, $87,600;
building, $237,200; equipment, $85,630; vehicles, $54,700; computers, $31,100; investments,
$53,100; accounts payable, $43,200; salaries payable, $16,500; notes payable (6-month),
$102,400; mortgage payable, $124,300; notes payable (3-year), $200,000; common stock,
$422,000; and retained earnings, $185,670.
NOTE: * Percents may vary by .1 due to rounding
Sticks & Stones Builder’s Mart
Balance Sheet
October 31, 2014
Assets
Current Assets Percent*
Cash $45,260 4.1%
Liabilities and Owner’s Equity
Current Liabilities
Accounts Payable $43,200 3.9%
Salaries Payable $16,500 1.5%
Notes Payable (6-month) $102,400 9.4%
Total Current Liabilities $162,100 14.8%
Level 2
Chapter 15 – Assessment Test – Exercise 10a
Use the following financial information to construct a 2013 income statement with vertical
analysis for Jazzline Jewelers: gross sales, $1,243,000; sales returns and allowances,
$76, 540; sales discounts, $21,300; merchandise inventory, Jan 1, 2013, $654,410; merchan-
dise inventory, Dec. 31, 2013, $413,200; net purchases, $318,000; freight in, $3,450; salaries,
$92,350; rent, $83,100; depreciation, $87,700; utilities, $21,350; advertising, $130,440; insur-
ance, $7,920; miscellaneous expenses, $105,900; and income tax, $18,580.
Revenue
Cost of Goods Sold
Gross Sales $1,243,000 108.5
Less:
Sales Returns and Allowances $76,540 6.7
Gross Margin $582,500 50.9
Operating Expenses
Income before Taxes $53,740 4.7
Salaries $92,350 8.1
Rent $83,100 7.3
Jazzline Jewelers
Income Statement
For the year ended December 31, 2013
Level 2
Chapter 15 – Assessment Test – Exercise 22
Prepare a trend analysis chart from the financial data listed below for Coastal Marine International.
4-year Selected Financial Data
2014 2013 2012 2011
Net Sales $898,700 $829,100 $836,200 $801,600
2014 2013 2012 2011
Coastal Marine International
Coastal Marine International
Trend Analysis Chart (%)
Level 3
Chapter 15 – Assessment Test – Exercise 23
As part of the trend analysis for Coastal Marine International, prepare a multiple-line chart for
the annual report comparing net sales and net income for the years 2011 through 2014.
Hint: Use Excel’s Chart Wizard .
2014 2013 2012 2011
Net Sales $898,700 $829,100 $836,200 $801,600
Net Income 96,300 92,100 94,400 89,700