Chapter 2
Problems 1-26
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
Chapter 2
Question 1
Input area:
Current assets 4,800$
Output area:
Balance sheet
Current assets 4,800$ Current liabilities 4,200$
Net fixed assets 27,500 Long-term debt 10,500
Net fixed assets 27,500
Current liabilities 4,200$
Long-term debt 10,500
Chapter 2
Questions 2-4
Input area:
Sales 734,000$
Output area:
Income Statement
Depreciation expense 48,000
Interest expense 35,000
Taxes (35%) 117,600
Addition to retained earnings 133,400$
Earnings per share 1.99$
Dividends per share 0.77$
Depreciation expense 48,000
Interest expense 35,000
Tax rate 35%
Cash dividends 85,000$
Shares outstanding 110,000
Chapter 2
Question 5
Input area:
Output area:
Net working capital 215,000$
Current liabilities 900,000
Book value of current assets 1,115,000$
Book value of net fixed assets 3,200,000
Market value of current assets 1,250,000$
Market value of net fixed assets 5,300,000
Market value of net fixed assets 5,300,000$
Book value of net fixed assets 3,200,000$
Book value of current liabilities 900,000$
Net working capital 215,000$
Market value of current assets 1,250,000$
Taxable income 255,000$
Taxable income
0 – 50,000 15%
50,001 – 75,000 25%
75,001 – 100,000 34%
100,001 – 335,000 39%
335,001 – 10,000,000 34%
10,000,001 – 15,000,000 35%
15,000,001 – 18,333,333 38%
18,333,334 + 35%
Chapter 2
Question 8
Input area:
Sales 39,500$
Output area:
Sales 39,500$
Depreciation expense 1,900
Interest expense 1,400
Taxes (35%) 6,230
Depreciation Expense 1,900
Interest Expense 1,400
Tax rate 35%
Chapter 2
Question 9
Input area:
Output area:
Dec. 31, 2010 net fixed assets 2,800,000$
Dec. 31, 2011 net fixed assets 3,600,000
Depreciation expense 345,000$
Chapter 2
Question 10
Input area:
Output area:
Ending NWC 1,480$
Beginning NWC 1,550$
Dec. 31, 2010 Current assets 3,120$
Dec. 31, 2010 Current liabilities 1,570
Dec. 31, 2011 current assets 3,460$
Dec. 31, 2011 current liabilities 1,980
Chapter 2
Question 11
Input area:
Dec. 31, 2010 Long-term debt 2,300,000$
Output area:
Dec. 31, 2011 Long-term debt 2,550,000$
Interest expense 190,000$
Chapter 2
Question 12
Input area:
Output area:
Dec. 31, 2010 Common stock 680,000$
Dec. 31, 2010 Additional paid-in surplus 4,300,000
Dec. 31, 2011 Common stock 715,000$
Dec. 31, 2011 Additional paid-in surplus 4,700,000
Cash dividends 540,000$
Chapter 2
Question 13
Input area:
Output area:
Cash flow from assets 45,000$
From problems 11,12:
2011 Cash flow to creditors (60,000)$
2011 Cash flow to stockholders 105,000
New information:
Change in net working capital (55,000)
Chapter 2
Question 14
Input area:
Output area:
Income Statement
Other expenses 7,900
Depreciation expense 17,300
Interest expense 12,900
Other expenses 7,900
Depreciation expense 17,300
Interest expense 12,900
2011 New equity 6,100$
Net new long-term debt (4,500)
Change in fixed assets 25,000