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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
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Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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Managerial Accounting

Customer Question

Praven Company Statement of Financial Position December 31, Year 2 and Year 1
(dollars in thousands)





Currrent assets:

Year 2 Year 1

Cash and marketable securities. . . . . . . . . . . . $ 150 $ 130
Accounts receivable, net . . . . . . . . . . . . . . . . . 190 160
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 180
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 50 40
Total current assets . . . . . . . . . . . . . . . . . . . . . . 560 510
Noncurrent assets:
Plant & equipment, net . . . . . . . . . . . . . . . . . . 1,420 1,330
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,980 $1,840

Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . $ 110 $ 100
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . 90 60
Notes payable, short term . . . . . . . . . . . . . . . . 260 260
Total current liabilities . . . . . . . . . . . . . . . . . . . 460 420
Noncurrent liabilities:
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . 400 400
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 860 820
Stockholder’s equity:
Preferred stock, $5 par, 15% . . . . . . . . . . . . . . 120 120
Common stock, $10 par . . . . . . . . . . . . . . . . . 240 240
Additional paid-in capital—common stock . . . . 210 210
Retained earnings . . . . . . . . . . . . . . . . . . . . . . 550 450
Total stockholders’ equity . . . . . . . . . . . . . . . . . 1,120 1,020
Total liabilities & stockholders’ equity . . . . . . . . $1,980 $1,840

Praven Company
Income Statement
For the Year Ended December 31, Year 2 (dollars in thousands)


Sales (all on account). . . . . . . . . . . . . . . . . . . . . $1,700
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . 1,190
Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . 510
Selling and administrative expense . . . . . . . . . . 200
Net operating income . . . . . . . . . . . . . . . . . . . . . 310
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . 40
Net income before taxes . . . . . . . . . . . . . . . . . . . 270
Income taxes (30%) . . . . . . . . . . . . . . . . . . . . . . 81
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 189


Dividends during Year 2 totaled $89 thousand, of which $18 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $130.






Compute the following for Year 2:

1. Book value per share

8. Average sale period

10. Debt-to-equity ratio


15. Nordstrand Company’s net income last year was
$36,000. Changes in selected balance sheet accounts for
the year appear below:

Increases

(Decreases)

Accounts receivable . . . . . . . . . . . . . . . . . . . . . $ (7,000)

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (5,000)

Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . $ 3,000
Credit balances:

Accumulated depreciation . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . .
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . .

Based solely on this information, the net cash provided by

operations under the indirect method on the state-
ment of cash flows would be how much?






Submitted: 3 years ago.
Category: Finance
Expert:  Manal Elkhoshkhany replied 3 years ago.

Hello

 

Thank you for requesting me. I had posted the solution, but then I have noticed that you are not accepting the solutions that are provided for you. I am not sure if you are aware that you need to click the Accept button for experts to get paid. Please advise

 

Thank you

Customer: replied 3 years ago.
I did not see the solution, sorry for the alate response.
Customer: replied 3 years ago.
Sorry I just realise that I had previously answered them, I responded that the answers were incorrect and I need to work with another expert.
Expert:  Manal Elkhoshkhany replied 3 years ago.
what answers were incorrect? Mine?

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