Sheet1This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash flow statement, a verticalanalysis, a horizontal analysis, and some ratio calculations. Scroll down the spreadsheet to complete each part.Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended 12/31/2015.They have completed the balance sheet and income statement as shown.Philadelphia Widget CorporationIncome StatementFor the year ended 12/31/2015Revenue1,235,000Cost of Goods Sold806,356Gross Profit428,644Administrative Expenses: Salaries212,450 Rent82,500 Depreciation24,800 Total Administrative Expense319,750Operating Profit108,894Gain on Sale of Equipment4,500Interest Expense(42,115)Net Income71,279Philadelphia Widget CorporationBalance SheetAs of 12/31/2015, 12/31/2014, and 12/31/2013Cash119,41189,564105,644Accounts Receivable85,45583,11878,400Inventory41,60048,56062,600Prepaid Expenses14,50018,10024,000 Total Current Assets260,966239,342270,644Land50,00050,00050,000Buildings and Equipment182,450172,450166,800Accumulated Depreciation78,900103,55062,600109,85054,580112,220 Total Assets414,516399,192432,864Accounts Payable62,52551,48045,200Wages payable4,5004,5001,500Unearned Revenue3,000- 0- 0Current Portion of Long-Term Debt50,00050,00050,000 Total Current Liabilities120,025105,98096,700Long-Term Debt175,000225,000275,000Common Stock, 3500 shares outstanding35,00035,00035,000Retained Earnings84,49133,21226,164 Total Stockholders' Equity119,49168,21261,164Total Liabilities and Equity414,516399,192432,864A. Prepare a Statement of Cash Flow using the indirect method for 2015 using the above statements and the following additional information: 1. Equipment costing $30,000 was purchased in 2015. 2. Equipment having an original cost of $20,000 and accumulated depreciation of $8,500 was sold for $16,000 during 2015. 3. A dividend of $20,000 was declared and paid in 2015.Philadelphia Widget CorporationStatement of Cash FlowFor the year ended 12/31/2015Cash flows from Operating ActivitiesNet Income71,279Adjustments Gain on sale of equipment(4,500)Depreciation Expense24,800Increase in Accounts Receivable(2,337)Decrease in Inventory6,960Decrease in Prepaid Expense3,600Increase in Accounts Payable11,045Increase in Unearned revenue3,00042,568Net cash flow from Operating Activities113,847Cash flows from Investing ActivitiesSale proceeds of sale of equipment16,000Purchase of Equipment(30,000)Net cash out-flow from Operating Activities(14,000)Cash flows from Financing ActivitiesPayment of Dividends(20,000)Repayment of Long term debt(50,000)Net cash out-flow from Financing Activities(70,000)Net Increase in cash29,847Cash Balance - Beginning89,564Cash Balance - Ending119,411B. Prepare a vertical analysis (1 year) of the income statement above and a horizontal analysis (2 years) of the balance sheet.Philadelphia Widget CorporationVertical Analysis of Income Statement2015AmountPercentRevenue1235000.
Sheet1This is a comprehensive problem all contained on this spread.docx
1. Sheet1This is a comprehensive problem all contained on this
spreadsheet tab. You are to prepare a cash flow statement, a
verticalanalysis, a horizontal analysis, and some ratio
calculations. Scroll down the spreadsheet to complete each
part.Philadelphia Widget Corporation is in the process of
preparing financial statements for the year ended
12/31/2015.They have completed the balance sheet and income
statement as shown.Philadelphia Widget CorporationIncome
StatementFor the year ended 12/31/2015Revenue1,235,000Cost
of Goods Sold806,356Gross Profit428,644Administrative
Expenses: Salaries212,450 Rent82,500 Depreciation24,800
Total Administrative Expense319,750Operating
Profit108,894Gain on Sale of Equipment4,500Interest
Expense(42,115)Net Income71,279Philadelphia Widget
CorporationBalance SheetAs of 12/31/2015, 12/31/2014, and
12/31/2013Cash119,41189,564105,644Accounts
Receivable85,45583,11878,400Inventory41,60048,56062,600Pre
paid Expenses14,50018,10024,000 Total Current
Assets260,966239,342270,644Land50,00050,00050,000Building
s and Equipment182,450172,450166,800Accumulated
Depreciation78,900103,55062,600109,85054,580112,220 Total
Assets414,516399,192432,864Accounts
Payable62,52551,48045,200Wages
payable4,5004,5001,500Unearned Revenue3,000- 0- 0Current
Portion of Long-Term Debt50,00050,00050,000 Total Current
Liabilities120,025105,98096,700Long-Term
Debt175,000225,000275,000Common Stock, 3500 shares
outstanding35,00035,00035,000Retained
Earnings84,49133,21226,164 Total Stockholders'
Equity119,49168,21261,164Total Liabilities and
Equity414,516399,192432,864A. Prepare a Statement of Cash
Flow using the indirect method for 2015 using the above
statements and the following additional information: 1.
Equipment costing $30,000 was purchased in 2015. 2.
2. Equipment having an original cost of $20,000 and accumulated
depreciation of $8,500 was sold for $16,000 during 2015. 3. A
dividend of $20,000 was declared and paid in 2015.Philadelphia
Widget CorporationStatement of Cash FlowFor the year ended
12/31/2015Cash flows from Operating ActivitiesNet
Income71,279Adjustments Gain on sale of
equipment(4,500)Depreciation Expense24,800Increase in
Accounts Receivable(2,337)Decrease in
Inventory6,960Decrease in Prepaid Expense3,600Increase in
Accounts Payable11,045Increase in Unearned
revenue3,00042,568Net cash flow from Operating
Activities113,847Cash flows from Investing ActivitiesSale
proceeds of sale of equipment16,000Purchase of
Equipment(30,000)Net cash out-flow from Operating
Activities(14,000)Cash flows from Financing ActivitiesPayment
of Dividends(20,000)Repayment of Long term debt(50,000)Net
cash out-flow from Financing Activities(70,000)Net Increase in
cash29,847Cash Balance - Beginning89,564Cash Balance -
Ending119,411B. Prepare a vertical analysis (1 year) of the
income statement above and a horizontal analysis (2 years) of
the balance sheet.Philadelphia Widget CorporationVertical
Analysis of Income
Statement2015AmountPercentRevenue1235000100.00%Cost of
Goods Sold80635665.29%Gross
Profit42864434.71%Administrative Expenses: Salaries212450
Rent82500 Depreciation24800 Total Administrative
Expense31975025.89%Operating Profit1088948.82%Gain on
Sale of Equipment45000.36%Interest Expense-42115-3.41%Net
Income712795.77%Philadelphia Widget CorporationHorizontal
Analysis of Balance
Sheet20152014VarianceAmountPercentageCash119,41189,5642
9,84733.32%Accounts
Receivable85,45583,1182,3372.81%Inventory41,60048,560(6,9
60)-14.33%Prepaid Expenses14,50018,100(3,600)-19.89%
Total Current
Assets260,966239,34221,6249.03%Land50,00050,000-
3. 00.00%Buildings and Equipment182,450172,450Accumulated
Depreciation16,300166,15062,600109,85056,30051.25% Total
Assets477,116399,19277,92419.52%Accounts
Payable62,52551,48011,04521.45%Wages payable4,5004,500-
00.00%Unearned Revenue3,000- 03,000Current Portion of
Long-Term Debt50,00050,000- 00.00% Total Current
Liabilities120,025105,98014,04513.25%Long-Term
Debt175,000225,000(50,000)-22.22%Common Stock, 3500
shares outstanding35,00035,000Retained Earnings51,27933,212
Total Stockholders' Equity86,27968,21218,06726.49%Total
Liabilities and Equity381,304399,192(17,888)-4.48%C.
Calculate the following ratios based on 12/31/2015 numbers:
1. Earnings per share20.37 2. Return on common stockholder's
equity92.3% 3. Return on assets16.3% 4. Current ratio2.17
5. Acid-test ratio1.71 6. Accounts receivable turnover14.65
