Thrifty Appliances, Inc. Information

Required: Using the financial ratios included with this assignment and the additional information given, prepare the following for Thrifty Appliances, Inc. for 2010:
a. Trial balance showing beginning of year balances, current year activity, and end of year balances.
b. Income Statement
c. Statement of Retained Earnings
d. Balance Sheet
e. Statement of Cash Flows
Show how you calculated each beginning and ending account balance.
Strategy:
1.Review the entire packet.  Information to help determine the answers is found on the Information, Ratios, Trial Balance, Income Statement, Balance Sheet, and Statement of Cash Flows worksheets.
2.Write down what you know (are given) in the appropriate ratios, trial balance, and financial statements.  This will help you see where there is only one missing amount (i.e., you can solve for that amount).
3.When you calculate an amount, cross-reference it into every applicable location.  It may be easiest to keep a separate page of calculations.  Give each calculation a reference number to be used in the cross-referencing.
4.You must use Excel for this assignment.  You can use references to other worksheets so that if you make changes it will automatically update the related fields.  This is not an Excel class, however, I can give limited Excel support (this is a time issue!).
5.I have designed the project so that most numbers will be in whole thousands (i.e., ###,000.  If you get an odd number (like 123,455) you probably have a mistake.  That is why the information has so many decimal places!
6.You may want to add rows to the trial balance for total current assets, total property, plant and equipment, total assets, etc. to make it easier to get information for ratios.
7.You may want to add rows to keep track of transactions with the cash account.
Thrifty Appliances, Inc. Information
INFORMATION IS AS OF 12/31/10 UNLESS OTHERWISE STATED Ratios  Amounts
1. Inventory Turnover Ratio 22.545454545
2. Inventory at 1/1/10   $1,500,000
3. Bond Interest Coverage 4.535353535
4. Common Stock originally sold at a premium of 50%
5. Cash Ratio 3.71063830%
6. Prepaid Expenses at 1/1/10   $40,000
7. Composition of total Plant, Property and Equipment is:
Land                  14.99772210%
Net Building        41.00227790%
Net Equipment    44.00000000%
8. Depreciation Expense (included in Operating Expenses)   $1,245,000
9. Buildings are 25% Depreciated
10. Ratio of Net Accounts Receivable to Accounts Payable  1.73609740
11. Accounts Payable at 1/1/10   $1,879,000
12. Ratio of Notes Payable to Bonds Payable  0.0500000
13. Preferred Stock (liquidation value is par value) originally sold at a 25% premium.
14. Cash Dividends Paid in January 2010 on Common Stock   $270,000
15. Cash Dividends Paid in January 2010 on Preferred Stock   $40,000
16. Accrued Expenses at 1/1/10   $425,000
17. Dividends Declared in December 2010 to be paid in January 2011   $328,000
18. Ratio of Unearned Sales Revenues to Current Liabilites 1.3264554164%
19. Unearned Revenue at 1/1/10   $-
20. Total Assets at 1/1/10   $13,271,000
21. Current Ratio 1.63350528126
22. Quick Ratio 1.45664455908
23. Return on Sales 2.862149533%
24. Gross Profit Ratio 42.056074766%
25. Equity Ratio 45.696453901%
26. Average Collection Period 30.92266355140
27. Accounts Receivable at 1/1/10   $2,000,000
28. Allowance for Doubtful Accounts at 1/1/10   $24,000
29. Allowance for Doubtful Accounts at 12/31/10   $64,000
30. Return on Assets 14.532625583%
31. Bonds issued at Par on 1/1/10 (outstanding all year – no other interest expense)   $2,000,000
32. Total Assets at 12/31/10   $17,625,000
33. Post-Closing Retained Earnings at 12/31/10    $5,404,000
34. Net Income for 2010   $1,225,000
35. Cash at 1/1/10   $875,000
36. Earnings Per Share of Common Stock for 2010  $1.3166666667

 

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