Automobile manufacturing industry | Accounting homework help

 

 

 

1.                   Prepare an analysis of the automobile manufacturing industry using Porter’s five forces framework. For each component force provide support for your conclusion. In addition, at the completion of your analysis provide a conclusion, along with support, of whether you expect the automobile industry to report high or low profitability in the near future.

 

              2.Tremble Company manufactures outdoors wear for women. During 2009, the company reported the following items that affected cash.

 

Required:

Indicate whether each of these items is a cash flow from operating activities (O), investing activities (I), or financing activities (F).

 

_____A. Paid cash for supplies

_____B. Purchased equipment by paying cash

_____C. Collected cash on account from customers

_____D. Paid dividends to stockholders

_____E. Paid suppliers for fabric

_____F. Borrowed money from a bank on a long-term no

 

 

 

_____G. Paid interest to bank on the note

_____H. Paid wages to employees

_____I. Sold shares of common stock to new stockholders

 

3. The following selected financial data pertain to four companies: a hotel, a travel agency, a meat packing company and a pharmaceutical company.

 

Required: Match each with the financial information and explain why you made your choice as you did.

 

Balance Sheet Data

(component percentages)

Company

1

Company

2

Company 3

Company 4

Cash

7.2

22.0

6.0

11.2

Accounts Receivable

28.0

40.0

3.4

23.0

Inventory

21.4

0.5

0.9

27.4

Property, Plant & Equipment

32.0

19.0

75.1

25.0

 

 

 

 

 

Income Statement Data

(component percentages)

 

 

 

 

Gross Profit

15.2

Not Applicable

Not Applicable

44.0

Profit before Taxes

1.8

3.3

2.5

7.0

 

 

 

 

 

Ratios

 

 

 

 

Current ratio (over the last five years)

1.6

1.3

0.5

1.8

Inventory turnover ratio

27.8

Not Applicable

Not Applicable

3.4

Debt-to-equity ratio

1.8

2.3

5.8

1.4

 

 

 

4. Use the current asset section of the balance sheets of the El Paso Company as of January 31, 2012 and 2011 presented below to answer the questions that follow.

 

                                                                                2012                    2011  

Cash and cash equivalents                          $   75,000            $   58,800

Trade accounts receivable, net                    157,500               193,200

Inventory                                                              208,200              253,400

Other current assets                                           18,400                  15,500

    Total current assets                                   $  459,100          $  520,900

Total assets                                                        $2,650,000         $3,430,000

 

Required:

 

(a) In the spaces provided below, complete a Percentage Change analysis of the current asset section of El Paso Company’s balance sheet for 2012, using the following format to provide your answers for the amount of dollar change and the amount of percentage change, rounding “% Change” to one decimal place, e.g., 8.3%.

 

Accounts             $ Change             % Change

 

(b) Provide a short evaluation of this analysis.

 

 

 

 

 

 

 

 5.  The analytical framework used to evaluate transactions is reproduced below:

 

Cash

 

+

Non-Cash

Assets

=

Liabilities

+

Contributed

Capital

+

Accumulated Other

Comprehensive

Income

+

Retained

Earnings

 

Using this analytical framework indicate the effect of each of the following transactions for TX Corporation:

 

a.

TX Corporation purchased marketable securities for $150,000 for cash.

b.

At the end of the period TX Corporation revalued the securities to $125,000.

c.

During the next period TX Corporation sells the securities for $165,000

 

6.  The analytical framework used to evaluate transactions is reproduced below:

 

Cash

 

+

Non-Cash

Assets

=

Liabilities

+

Contributed

Capital

+

Accumulated Other

Comprehensive

Income

+

Retained

Earnings

 

Using this analytical framework indicate the effect of each of the following transactions for Wisco Corporation:

 

1.

Wisco sold merchandise for $225,000 on account which cost $170,000 to manufacture.

2.

Wisco purchased for cash $110,000 of raw material inventory.

3.

The company paid $25,000 in advance for an advertising campaign that would be aired next year.

4.

Wisco paid its employees $15,000 for the month.

5.

The company purchased $7,000 of supplies on account.

6.

Wisco issued $25,000 of long-term debt.

7.

The company used $10,000 of excess cash to purchase marketable securities.

8.

Wisco purchased a machine for $22,000 in cash.

9.

At the end of the year Wisco paid dividends of $5,000.

10.

At the end of the year the marketable securities that Wisco purchased in transaction 7 were now worth $11,500.

11.

Depreciation for the period was $1,500.

 

 

 

 

 

 

 

 

 

 

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