Problem 1

Plastics Inc. is a company that operates in four different divisions. The following information relating to each segment is avai

Sales revenue
Bottles
Containers
Dollhouses
Silverware

$65,000
$95,000
$620,000
$18,000

Cost of goods Operating

Total
sold
expenses
expenses
$26,000
$8,000
$34,000
$62,000
$48,000
$110,000
$353,000
$140,000
$493,000
$8,000
$6,500
$14,500

Sales of segments Containers and Dollhouses included intersegment sales of $30,000 and $150,000, respectively.
Required
Determine which of the segments are reportable based on the following:
Revenue Test
Operating profit (loss) test
Identifiable assets test

Sales revenue
Bottles
Containers
Dollhouses
Silverware
Total

Revenue Test:
Operating Profit Test:
Identifiable assets test:

$65,000
$95,000
$620,000
$18,000
$798,000

Cost of goods Operating

Total
sold
expenses
expenses
$26,000
$8,000
$34,000
$62,000
$48,000
$110,000
$353,000
$140,000
$493,000
$8,000
$6,500
$14,500
$449,000
$202,500
$651,500

$79,800 (Dollhouses [620,000] & Containers [95,000])

$14,650 (Bottles 31,000/146,500=21.16%] & Dollhouses [127,000/146,500=8
$82,200 (Dollhouses [640,000])

Problem 2
The following information pertains to Walrus Inc.
Cash
$60,000
Accounts receivable
170,000
Inventory
100,000
Plant assets (net)
582,000

Total assets

$912,000

Accounts payable
Accrued taxes and expenses payable
Long-term debt
Common stock ($10 par)
Paid-in capital in excess of par
Retained earnings
Total equities

$110,000
42,000
120,000
260,000
50,000
330,000
$912,000

Net sales (all on credit)

Cost of goods sold
Net income

$2,000,000
1,400,000
120,000

Required:
Compute the following:
(ignore Avg for balance sheet accounts)
a) Current ratio
b) Inventory turnover
c) Receivable turnover
d) Book value per share
e) Earnings per share
f) Debt to total assets
g) Profit margin on sales
h) Return on common stock equity

330,000/152,000 = 2.17
1,400,000/100,000 = 14.00
2,000,000/170,000 = 11.76
640,000/26,000 = 24.62
120,000/26,000 = 4.62
272,000/912,000 = 0.30
120,000/2,000,000 = 6%
120,000/640,000 = 0.19

Curr. Assets/Curr. Liabilities

COGS/Inventory
Sales/AR
S.E./Shares outstanding
Net income/Shares outstanding
Total debt/total assets
Net income/Sales
Net income/total equity

ation relating to each segment is available for 2013.

Operating
Identifiable
profit (loss) assets
$31,000
$66,000
($15,000)
$80,000
$127,000
$640,000
$3,500
$36,000

nd $150,000, respectively.

Operating
Identifiable
profit (loss) assets
$31,000
$66,000
($15,000)
$80,000
$127,000
$640,000
$3,500
$36,000
$146,500
$822,000

ners [95,000])
%] & Dollhouses [127,000/146,500=86.69%])

urr. Assets/Curr. Liabilities

OGS/Inventory

E./Shares outstanding
et income/Shares outstanding
otal debt/total assets
et income/Sales
et income/total equity