Related questions with answers

The postclosing trial balance of the general fund of Serene Hospital, a not-for-profit entity, on December 31, 20X1, was as follows:

 Debit CreditCash$125,000Accounts Receivable400,000Allowance for Uncollectibles$50,000Due from Specific - Purpose Fund40,000Inventories95,000Prepaid Expenses20,000Investments900,000Property, Plant & Equipment6,100,000Accumulated Depreciation1,500,000Accounts Payable150,000Accrued Expenses55,000Deferred Revenue - Reimbursement75,000Bonds Payable3,000,000Fund Balance - Without Donor Restrictions2,850,000Total$7,680,000$7,680,000\begin{array}{lrr} & \textbf{ Debit } & \textbf{Credit} \\ \\ \text{Cash} & \$\hspace{10pt}125,000 \\ \text{Accounts Receivable} & 400,000 \\ \text{Allowance for Uncollectibles} && \$\hspace{15pt}50,000 \\ \text{Due from Specific - Purpose Fund} & 40,000 \\ \text{Inventories} & 95,000 \\ \text{Prepaid Expenses} & 20,000 \\ \text{Investments} & 900,000 \\ \text{Property, Plant \& Equipment} & 6,100,000 \\ \text{Accumulated Depreciation} & & 1,500,000 \\ \text{Accounts Payable} & & 150,000 \\ \text{Accrued Expenses} & & 55,000 \\ \text{Deferred Revenue - Reimbursement} & & 75,000 \\ \text{Bonds Payable} & & 3,000,000 \\ \text{Fund Balance - Without Donor Restrictions} && 2,850,000 \\ \hline \text{Total} & \underline{\underline{\$7,680,000}} & \underline{\underline{\$7,680,000}}\\ \end{array}

During 20X2 the following transactions occurred:

1. Provided the value of patient services, $6,160,000.

2. Approved contractual adjustments of$330,000 from patients' bills.

3. Had operating expenses totaling $5,600,000 as follows:

Nursing services$1,800,000Other professional services1,200,000Fiscal services250,000General services1,550,000Bad debts120,000Administration280,000Depreciation400,000\begin{array}{lr} \text{Nursing services} & \$1,800,000 \\ \text{Other professional services} & 1,200,000\\ \text{Fiscal services} & 250,000 \\ \text{General services} & 1,550,000\\ \text{Bad debts} & 120,000 \\ \text{Administration} & 280,000 \\ \text{Depreciation} & 400,000 \\ \end{array}

Accounts credited for operating expenses other than depreciation:

Cash$4,580,000Allowance for Uncollectibles120,000Accounts Payable170,000Accrued Expenses35,000Inventories195,000Prepaid Expenses30,000Donated Services70,000\begin{array}{lr} \text{Cash} & \$4,580,000 \\ \text{Allowance for Uncollectibles} & 120,000 \\ \text{Accounts Payable} & 170,000 \\ \text{Accrued Expenses} & 35,000 \\ \text{Inventories} & 195,000 \\ \text{Prepaid Expenses} & 30,000 \\ \text{Donated Services} & 70,000 \\ \end{array}

4. Received $75,000 cash from specific-purpose fund for partial reimbursement of$100,000 for operating expenditures made in accordance with a restricted gift. The receivable increased by the remaining $25,000 to an ending balance of$65,000.

5. Had payments for inventories and prepaid expenses of $176,000 and$24,000, respectively.

6. Received $85,000 income from endowment fund investments.

7. Sold for$17,000 an X-ray machine that had cost $30,000 and had accumulated depreciation of$20,000.

8. Collected $5,800,000 in receivables and wrote off$132,000.

9. Acquired investments amounting to $60,000.

10. Had$72,000 income from board-designated investments.

11. Paid the beginning balance in Accounts Payable and Accrued Expenses.

12. Had a $20,000 increase in Deferred Revenue-Reimbursement.

13. Received$140,000 from the plant replacement and expansion fund for acquiring fixed assets.

14. Had $63,000 in net receipts from the cafeteria and gift shop.

Required

Prepare a statement of cash flows for 20X2.

To obtain a more accurate picture of the impact of air bags on preventing deaths, it is necessary to account for the effect of occupants using both seatbelts and air bags. If the occupants of the vehicles in which air bags are installed are more likely to be also wearing seat belts, then it is possible that some of the apparent effectiveness of the air bags is in fact due to the increased usage of seat belts. Thus, one more 2 2 table is necessary, the table displaying a comparison of proper seat belt usage for occupants with air bags available with those for occupants without air bags available. That data are given here. a. Is there significant evidence of an association between air bag installation and the proper usage of seat belts? Use α\alpha = .05 b. Provide justification for your results in part (a). REFERENCE: The authors also collected information about accidents concerning seat belt usage. The article compared fatality rates for occupants using seat belts properly with those for occupants not using seat belts. The data are given here. a. Calculate the odds of being killed in a harmful event car accident for a vehicle in which occupants were using seat belts and those who were not using seat belts. Interpret the two odds. b. Calculate the odds ratio of being killed in a harmful event car accident with and without seat belts being used properly. What does this ratio tell you about the importance of using seat belts? c. Is there significant evidence of a difference between vehicles with and without proper seat belt usage relative to the proportion of persons killed in a harmful event vehicle accident? Use α\alpha = .05. d. Place a 95% confidence interval on the odds ratio. Interpret this interval. 10.54 : The article “Who Wants Airbags” in Chance 18 (2005): 3–16 discusses whether air bags should be mandatory equipment in all new automobiles. Using data from the National Highway Traffic Safety Administration (NHTSA), they obtain the following information about fatalities and the usage of air bags and seat belts. All passenger cars sold in the U.S. starting in 1998 are required to have air bags. NHTSA estimates that air bags have saved 10,000 lives as of January 2004. The authors examined accidents in which there was a harmful event (personal or property), and from which at least one vehicle was towed. After some screening of the data, they obtained the following results. (The authors detail in their article the types of screening of the data that was done.) a. Calculate the odds of being killed in a harmful event car accident for a vehicle with and without air bags. Interpret the two odds. b. Calculate the odds ratio of being killed in a harmful event car accident with and without air bags. What does this ratio tell you about the importance of having air bags in a vehicle? c. Is there significant evidence of a difference between vehicles with and without air bags relative to the proportion of persons killed in a harmful event vehicle accident? Use α\alpha = .05. d. Place a 95% confidence interval on the odds ratio. Interpret this interval.

 Air Bag Installed YesAir Bag Installed NoTotalKilled19,27627,92447,200Survived5,723,5394,826,98210,550,521Total5,742,8154,854,90610,597,721\begin{matrix} \text{ } & \text{Air Bag Installed Yes} & \text{Air Bag Installed No} & \text{Total}\\ \text{Killed} & \text{19,276} & \text{27,924} & \text{47,200}\\ \text{Survived} & \text{5,723,539} & \text{4,826,982} & \text{10,550,521}\\ \text{Total} & \text{5,742,815} & \text{4,854,906} & \text{10,597,721}\\ \end{matrix}

 Seat Belt Usage (Sealt Belt)Seat Belt Usage (No Sealt Belt)TotalKilled16,00131,19947,200Survived7,758,6342,791,88710,550,521Total7,774,6352,823,08610,597,721\begin{matrix} \text{ } & \text{Seat Belt Usage (Sealt Belt)} & \text{Seat Belt Usage (No Sealt Belt)} & \text{Total}\\ \text{Killed} & \text{16,001} & \text{31,199} & \text{47,200}\\ \text{Survived} & \text{7,758,634} & \text{2,791,887} & \text{10,550,521}\\ \text{Total} & \text{7,774,635} & \text{2,823,086} & \text{10,597,721}\\ \end{matrix}

Air BagsSeat Belt Usage (Sealt Belt)Seat Belt Usage (No Sealt Belt)TotalYes4,871,940870,8755,742,815No2,902,6941,952,2114,854,905Total7,774,6342,823,08610,597,720\begin{matrix} \text{Air Bags} & \text{Seat Belt Usage (Sealt Belt)} & \text{Seat Belt Usage (No Sealt Belt)} & \text{Total}\\ \text{Yes} & \text{4,871,940} & \text{870,875} & \text{5,742,815}\\ \text{No} & \text{2,902,694} & \text{1,952,211} & \text{4,854,905}\\ \text{Total} & \text{7,774,634} & \text{2,823,086} & \text{10,597,720}\\ \end{matrix}

See Table down below showing financial statement data and stock price data for Mydeco Corp.

a. Compute Mydeco's ROE each year from 20122012 to 20162016.

b. Compute Mydeco's ROA each year from 20122012 to 20162016.

c. Which return is more volatile? Why?

2012–2016 Financial Statement Data and Stock Price Data for Mydeco Corp

Mydeco Corp. 2012–2016 \hspace{30mm} (All data as of fiscal year end; in million)million)

Income statement20122013201420152016Revenue401.9361.6429.6513.6602.6Cost of Goods Sold(192.1)(175.4)(207.1)(248.3)(295.8)Gross Profit209.8186.2222.5265.3306.8Sales and Marketing(65.0)(64.4)(84.3)(104.9)(121.1)Administration(61.8)(57.1)(59.0)(66.9)(79.8)Depreciation & Amortization(27.5)(26.3)(32.5)(38.3)(40.1)EBIT55.538.446.755.265.8Interest Income (Expense)(32.4)(31.8)(32.0)(37.0)(40.9)Pretax Income23.16.614.718.224.9Income Tax(8.1)(2.3)(5.1)(6.4)(8.7)Net Income15.04.39.611.816.2Shares outstanding (millions)56.856.856.856.856.8Earnings per share$0.26$0.08$0.17$0.21$0.29Balance Sheet20122013201420152016AssetsCash49.468.091.780.483.6Accounts Receivable87.670.669.377.484.2Inventory33.532.227.330.235.8Total Current Assets170.5170.8188.3188.0203.6Net Property, Plant & Equip.244.3243.3306.1349.6347.9Goodwill & Intangibles365.5365.5365.5365.5365.5Total Assets780.3779.6859.9903.1917.0Liabilities & Stockholders’ EquityAccounts Payable18.818.822.427.130.3Accrued Compensation7.66.37.57.79.4Total Current Liabilities26.425.129.934.839.7Long-term Debt498.9498.9572.2597.5597.5Total Liabilities525.3524602.1632.3637.2Stockholders’ Equity255.0255.6257.8270.8279.8Total Liabilities & Stockholders’ Equity780.3779.6859.9903.1917.0Statement of Cash Flows20122013201420152016Net Income15.04.39.611.816.2Depreciation & Amortization27.526.332.538.340.1Chg. in Accounts Receivable3.917.01.3(8.1)(6.8)Chg. in Inventory(2.9)1.34.9(2.9)(5.6)Chg. in Payables & Accrued Comp.1.7(1.3)4.84.94.9Cash from Operations45.247.653.144.048.8Capital Expenditures(26.6)(23.8)(97.5)(75.4)(40.0)Cash from Investing Activities(26.6)(23.8)(97.5)(75.4)(40.0)Dividends Paid(5.2)(5.2)(5.2)(5.2)(5.6)Sale (or purchase) of stockDebt Issuance (Pay Down)73.325.3Cash from Financing Activities(5.2)(5.2)68.120.1(5.6)Change in Cash13.418.623.7(11.3)3.2Mydeco Stock Price$7.02$3.55$5.86$8.33$11.57\begin{array}{lccccc} \text{Income statement} & 2012 & 2013 & 2014 & 2015 & 2016 \\ \text{Revenue} & 401.9 & 361.6 & 429.6 & 513.6 & 602.6 \\ \underline{\text{Cost of Goods Sold}} & (192.1) & (175.4) & (207.1) & (248.3) & (295.8)\\ \text{Gross Profit} & 209.8 & 186.2 & 222.5 & 265.3 & 306.8\\ \text{Sales and Marketing} & (65.0) & (64.4) & (84.3) & (104.9) & (121.1)\\ \text{Administration} & (61.8) & (57.1) & (59.0) & (66.9) & (79.8)\\ \underline{\text{Depreciation $\And$ Amortization}} & (27.5) & (26.3) & (32.5) & (38.3) & (40.1)\\ \text{EBIT} & 55.5 & 38.4 & 46.7 & 55.2 & 65.8\\ \underline{\text{Interest Income (Expense)}} & (32.4) & (31.8) & (32.0) & (37.0) & (40.9)\\ \text{Pretax Income} & 23.1 & 6.6 & 14.7 & 18.2 & 24.9\\ \underline{\text{Income Tax}} & (8.1) & (2.3) & (5.1) & (6.4) & (8.7)\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Shares outstanding (millions)} & 56.8 & 56.8 & 56.8 & 56.8 & 56.8\\ \text{Earnings per share} & \$0.26 & \$0.08 & \$0.17 & \$0.21 & \$0.29\\ \text{Balance Sheet} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Assets}\\ \text{Cash} & 49.4 & 68.0 & 91.7 & 80.4 & 83.6\\ \text{Accounts Receivable} & 87.6 & 70.6 & 69.3 & 77.4 & 84.2\\ \text{Inventory} & 33.5 & 32.2 & 27.3 & 30.2 & 35.8\\ \text{Total Current Assets} & 170.5 & 170.8 & 188.3 & 188.0 & 203.6\\ \text{Net Property, Plant $\And$ Equip.} & 244.3 & 243.3 & 306.1 & 349.6 & 347.9\\ \text{Goodwill $\And$ Intangibles} & 365.5 & 365.5 & 365.5 & 365.5 & 365.5\\ \text{Total Assets} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Liabilities $\And$ Stockholders’ Equity}\\ \text{Accounts Payable} & 18.8 & 18.8 & 22.4 & 27.1 & 30.3\\ \text{Accrued Compensation} & 7.6 & 6.3 & 7.5 & 7.7 & 9.4\\ \text{Total Current Liabilities} & 26.4 & 25.1 & 29.9 & 34.8 & 39.7\\ \text{Long-term Debt} & 498.9 & 498.9 & 572.2 & 597.5 & 597.5\\ \text{Total Liabilities} & 525.3 & 524 & 602.1 & 632.3 & 637.2\\ \text{Stockholders’ Equity} & 255.0 & 255.6 & 257.8 & 270.8 & 279.8\\ \text{Total Liabilities $\And$ Stockholders’ Equity} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Statement of Cash Flows} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Depreciation $\And$ Amortization} & 27.5 & 26.3 & 32.5 & 38.3 & 40.1\\ \text{Chg. in Accounts Receivable} & 3.9 & 17.0 & 1.3 & (8.1) & (6.8)\\ \text{Chg. in Inventory} & (2.9) & 1.3 & 4.9 & (2.9) & (5.6)\\ \underline{\text{Chg. in Payables $\And$ Accrued Comp.}} & 1.7 & (1.3) & 4.8 & 4.9 & 4.9\\ \text{Cash from Operations} & 45.2 & 47.6 & 53.1 & 44.0 & 48.8\\ \underline{\text{Capital Expenditures}} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Cash from Investing Activities} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Dividends Paid} & (5.2) & (5.2) & (5.2) & (5.2) & (5.6)\\ \text{Sale (or purchase) of stock} & — & — & — & — & —\\ \underline{\text{Debt Issuance (Pay Down)}} & — & — & 73.3 & 25.3 & —\\ \text{Cash from Financing Activities} & (5.2) & (5.2) & 68.1 & 20.1 & (5.6)\\ \text{Change in Cash} & 13.4 & 18.6 & 23.7 & (11.3) & 3.2\\ \text{Mydeco Stock Price} & \$7.02 & \$3.55 & \$5.86 & \$8.33 & \$11.57\\ \end{array}

$

Question

See Table down below showing financial statement data and stock price data for Mydeco Corp. Use the data from the balance sheet and cash flow statement in 20122012 to determine the following:

a. How much cash did Mydeco have at the end of 20112011?

b. What were Mydeco's accounts receivable and inventory at the end of 20112011?

c. What were Mydeco's total liabilities at the end of 20112011?

d. Assuming goodwill and intangibles were equal in 20112011 and 20122012, what was Mydeco's net property, plant, and equipment at the end of 20112011?

2012–2016 Financial Statement Data and Stock Price Data for Mydeco Corp

Mydeco Corp. 2012–2016 \hspace{30mm} (All data as of fiscal year end; in million)million)

Income statement20122013201420152016Revenue401.9361.6429.6513.6602.6Cost of Goods Sold(192.1)(175.4)(207.1)(248.3)(295.8)Gross Profit209.8186.2222.5265.3306.8Sales and Marketing(65.0)(64.4)(84.3)(104.9)(121.1)Administration(61.8)(57.1)(59.0)(66.9)(79.8)Depreciation & Amortization(27.5)(26.3)(32.5)(38.3)(40.1)EBIT55.538.446.755.265.8Interest Income (Expense)(32.4)(31.8)(32.0)(37.0)(40.9)Pretax Income23.16.614.718.224.9Income Tax(8.1)(2.3)(5.1)(6.4)(8.7)Net Income15.04.39.611.816.2Shares outstanding (millions)56.856.856.856.856.8Earnings per share$0.26$0.08$0.17$0.21$0.29Balance Sheet20122013201420152016AssetsCash49.468.091.780.483.6Accounts Receivable87.670.669.377.484.2Inventory33.532.227.330.235.8Total Current Assets170.5170.8188.3188.0203.6Net Property, Plant & Equip.244.3243.3306.1349.6347.9Goodwill & Intangibles365.5365.5365.5365.5365.5Total Assets780.3779.6859.9903.1917.0Liabilities & Stockholders’ EquityAccounts Payable18.818.822.427.130.3Accrued Compensation7.66.37.57.79.4Total Current Liabilities26.425.129.934.839.7Long-term Debt498.9498.9572.2597.5597.5Total Liabilities525.3524602.1632.3637.2Stockholders’ Equity255.0255.6257.8270.8279.8Total Liabilities & Stockholders’ Equity780.3779.6859.9903.1917.0Statement of Cash Flows20122013201420152016Net Income15.04.39.611.816.2Depreciation & Amortization27.526.332.538.340.1Chg. in Accounts Receivable3.917.01.3(8.1)(6.8)Chg. in Inventory(2.9)1.34.9(2.9)(5.6)Chg. in Payables & Accrued Comp.1.7(1.3)4.84.94.9Cash from Operations45.247.653.144.048.8Capital Expenditures(26.6)(23.8)(97.5)(75.4)(40.0)Cash from Investing Activities(26.6)(23.8)(97.5)(75.4)(40.0)Dividends Paid(5.2)(5.2)(5.2)(5.2)(5.6)Sale (or purchase) of stockDebt Issuance (Pay Down)73.325.3Cash from Financing Activities(5.2)(5.2)68.120.1(5.6)Change in Cash13.418.623.7(11.3)3.2Mydeco Stock Price$7.02$3.55$5.86$8.33$11.57\begin{array}{lccccc} \text{Income statement} & 2012 & 2013 & 2014 & 2015 & 2016 \\ \text{Revenue} & 401.9 & 361.6 & 429.6 & 513.6 & 602.6 \\ \underline{\text{Cost of Goods Sold}} & (192.1) & (175.4) & (207.1) & (248.3) & (295.8)\\ \text{Gross Profit} & 209.8 & 186.2 & 222.5 & 265.3 & 306.8\\ \text{Sales and Marketing} & (65.0) & (64.4) & (84.3) & (104.9) & (121.1)\\ \text{Administration} & (61.8) & (57.1) & (59.0) & (66.9) & (79.8)\\ \underline{\text{Depreciation $\And$ Amortization}} & (27.5) & (26.3) & (32.5) & (38.3) & (40.1)\\ \text{EBIT} & 55.5 & 38.4 & 46.7 & 55.2 & 65.8\\ \underline{\text{Interest Income (Expense)}} & (32.4) & (31.8) & (32.0) & (37.0) & (40.9)\\ \text{Pretax Income} & 23.1 & 6.6 & 14.7 & 18.2 & 24.9\\ \underline{\text{Income Tax}} & (8.1) & (2.3) & (5.1) & (6.4) & (8.7)\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Shares outstanding (millions)} & 56.8 & 56.8 & 56.8 & 56.8 & 56.8\\ \text{Earnings per share} & \$0.26 & \$0.08 & \$0.17 & \$0.21 & \$0.29\\ \text{Balance Sheet} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Assets}\\ \text{Cash} & 49.4 & 68.0 & 91.7 & 80.4 & 83.6\\ \text{Accounts Receivable} & 87.6 & 70.6 & 69.3 & 77.4 & 84.2\\ \text{Inventory} & 33.5 & 32.2 & 27.3 & 30.2 & 35.8\\ \text{Total Current Assets} & 170.5 & 170.8 & 188.3 & 188.0 & 203.6\\ \text{Net Property, Plant $\And$ Equip.} & 244.3 & 243.3 & 306.1 & 349.6 & 347.9\\ \text{Goodwill $\And$ Intangibles} & 365.5 & 365.5 & 365.5 & 365.5 & 365.5\\ \text{Total Assets} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Liabilities $\And$ Stockholders’ Equity}\\ \text{Accounts Payable} & 18.8 & 18.8 & 22.4 & 27.1 & 30.3\\ \text{Accrued Compensation} & 7.6 & 6.3 & 7.5 & 7.7 & 9.4\\ \text{Total Current Liabilities} & 26.4 & 25.1 & 29.9 & 34.8 & 39.7\\ \text{Long-term Debt} & 498.9 & 498.9 & 572.2 & 597.5 & 597.5\\ \text{Total Liabilities} & 525.3 & 524 & 602.1 & 632.3 & 637.2\\ \text{Stockholders’ Equity} & 255.0 & 255.6 & 257.8 & 270.8 & 279.8\\ \text{Total Liabilities $\And$ Stockholders’ Equity} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Statement of Cash Flows} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Depreciation $\And$ Amortization} & 27.5 & 26.3 & 32.5 & 38.3 & 40.1\\ \text{Chg. in Accounts Receivable} & 3.9 & 17.0 & 1.3 & (8.1) & (6.8)\\ \text{Chg. in Inventory} & (2.9) & 1.3 & 4.9 & (2.9) & (5.6)\\ \underline{\text{Chg. in Payables $\And$ Accrued Comp.}} & 1.7 & (1.3) & 4.8 & 4.9 & 4.9\\ \text{Cash from Operations} & 45.2 & 47.6 & 53.1 & 44.0 & 48.8\\ \underline{\text{Capital Expenditures}} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Cash from Investing Activities} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Dividends Paid} & (5.2) & (5.2) & (5.2) & (5.2) & (5.6)\\ \text{Sale (or purchase) of stock} & — & — & — & — & —\\ \underline{\text{Debt Issuance (Pay Down)}} & — & — & 73.3 & 25.3 & —\\ \text{Cash from Financing Activities} & (5.2) & (5.2) & 68.1 & 20.1 & (5.6)\\ \text{Change in Cash} & 13.4 & 18.6 & 23.7 & (11.3) & 3.2\\ \text{Mydeco Stock Price} & \$7.02 & \$3.55 & \$5.86 & \$8.33 & \$11.57\\ \end{array}

$

Solution

Verified
Answered 1 year ago
Answered 1 year ago
Step 1
1 of 6

In this problem, we are asked to analyze and compute Mydeco's cash, receivables and inventory, liabilities and property, plant, and equipment at the end of 2011.

Create an account to view solutions

Create an account to view solutions

More related questions

1/4