The following data were taken from Alvarado Company’s balance sheet:

Particulars	Dec. 31, 2014	Dec. 31, 2013
Total liabilities	$  4,085,000	$  2,880,000
Total owner's equity	4,300,000	3,600,000

a. Compute the ratio of liabilities to owner’s equity. b. Has the creditor’s risk increased or decreased from December 31, 2013, to December 31, 2014?

The following information was taken from Sigmund Company's balance sheet:

$$\begin{array}{lr}\text { Fixed assets (net) } & \$ 1,050,000 \\ \text { Long-term liabilities } & 750,000 \\ \text { Total liabilities } & 850,000 \\ \text { Total stockholders' equity } & 500,000\end{array}$$

Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders' equity. Round to one decimal place.

Finch Company had the following assets and liabilities on the dates shown.

Finch began business on January 1, 2016, with an investment of $100,000.

Instructions
From an analysis of the change in owner’s equity during the year, compute the net income (or loss) for 2016, assuming Finch’s drawings were$15,000 for the year.

Finch Company had the following assets and liabilities on the dates indicated.

$$\begin{array}{crr} \textbf{December 31} & \textbf{Total Assets} & \textbf{Total Liabilities}\\ \\ 2016 & \$400,000 & \$250,000\\ 2017 & \$460,000 & \$300,000\\ 2018 & \$590,000 & \$400,000\\ \end{array}$$

Instructions

From an analysis of the change in owner’s equity during the year, compute the net income/loss for 2017, assuming Finch made an additional investment of $45,000. No drawings in 2017.

At the beginning of the year, Vendors Incorporated had owner's equity of $50,630. During the year, net income was$6,850 and the company paid dividends of $4,630. The company also repurchased$8,930 in equity. What was the owner's equity account at the end of the year?

Income statement information for Einsworth Corporation follows:

$$\begin{array}{lr} \text { Sales } & \$ 1,200,000 \\ \text { Cost of goods sold } & 780,000 \\ \text { Gross profit } & 420,000 \end{array}$$

Prepare a vertical analysis of the income statement for Einsworth Corporation. (Round percentages to one decimal place.)

The comparative temporary investments and inventory balances of a company follow.

$$\begin{array}{lcc} & \text { Current Year } & \text { Previous Year } \\ \hline \text { Temporary investments } & \$ 44,000 & \$ 40,000 \\ \text { Inventory } & 57,000 & 60,000 \end{array}$$

Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis?

Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) stockholders’ equity: supplies

A summary of cash flows for Sentinel Travel Service for the year ended August 31, 2014, is shown below.

$$\begin{array}{lr} \text{Cash Receipts:}&\\ \quad\text{Cash received from customers}&\$734,000\\ \quad\text{Cash received from issuing capital stock}&36,000\\ \text{Cash payments:}&\\ \quad\text{Cash paid for operating expenses}&745,600\\ \quad\text{Cash paid for land}&50,000\\ \quad\text{Cash paid for dividends}&18,000\\ \end{array}$$

The cash balance as of September 1, 2013, was $89,000. Prepare a statement of cash flows for Sentinel Travel Service for the year ended August 31, 2014.

A summary of cash flows for A-One Travel Service for the year ended August 31, 20Y6, follows:

• Cash received from customers = $264,130
• Cash received from issuing common stock = 26,400
• Cash paid for operating expenses = 221,870
• Cash paid for land = 43,500
• Cash paid for dividends = 5,300

The cash balance as of September 1, 20Y5, was$121,510.

Prepare a statement of cash flows for A-One Travel Service for the year ended August 31, 20Y6. Use the minus sign to indicate cash outflows, cash payments and decreases in cash.

A summary of cash flows for Sentinel Travel Service for the year ended August 31, 2014, is shown below.

The cash balance as of September 1, 2013, was$89,000. Prepare a statement of cash flows for Sentinel Travel Service for the year ended August 31, 2014.

Moss Co. issued $42,000,000 of five-year, 11% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bond payable using the present value tables in Exhibits 8 and 10. Round to the nearest dollar.

If bonds are issued at a discount, it means that the

a. financial strength of the issuer is suspect.

b. bondholder will receive effectively less interest than the contractual interest rate.

c. market interest rate is higher than the contractual interest rate.

d. market interest rate is lower than the contractual interest rate.

Preferred stock issued in exchange for land would be reported in the statement of cash flows in:

a.the cash flows from investing activities section

b.a separate schedule

c.the cash flows from the operating activities section

d.the cash flows from the financing activities section