AMFAC Inc.
Case Analysis
AMFAC INC.
In Partial Fulfilment of the Course Requirement for
BA 206 - Managerial Accounting
Submitted by:
Ampatin, Jupiter C.
Bacitas, Benjamin C.
Crisologo, Buddy L.
Salazar, Lancer James L.
Submitted to:
Rosfe Corlae D. Badoy, CPA, Ph.D.
August 2, 2014
I. Statement of the Problem
The financial statements of Amfac Inc. are given below:
AMFAC INC.
Balance Sheet
As of December 31, XXXX
Assets
Cash 8,000
Accounts Receivable, net 36,000
Merchandise Inventory 40,000
Prepaid Expenses 2,000
Plant and Equipment, net 214,000
Total Assets 300,000
Liabilities & Equities
Current Liabilities 30,000
Long-term Liabilities 60,000
Preferred Stock 50,000
Common Stock, $10 par 30,000
Retained Earnings 120,000
Total Liabilities & Equity 300,000
AMFAC INC.
Income Statement
For Year Ended December 31, XXXX
Sales 450,000
Cost of Goods Sold 270,000
Gross Margin 180,000
Operating Expenses 129,000
Net Operating Income 51,000
Interest Expense 6,000
Net Income before Taxes 45,000
Income Taxes (30%) 13,500
Net Income 31,500
Accounts receivable and inventory remained relatively constant during the year. Assets at the beginning of the year totalled $250,000 and the stockholders’ equity at the beginning of the year amounted to $180,000. Preferred stock did not change during the year. There are no convertible securities.
Analyze the financial statements of AMFAC Inc. taking into consideration the following:
a. Current Ratio
b. Acid Test Ratio
c. Debt-to-Equity Ratio
d. Accounts Receivable Turnover in Days
e. Inventory Turnover
f. Times Interest Earned
g. Return on Assets
h. Return on Common Stockholders’ Equity
II. Answers/Solutions
A. Current Ratio
=Current Assets/Current
AMFAC INC.
In Partial Fulfilment of the Course Requirement for
BA 206 - Managerial Accounting
Submitted by:
Ampatin, Jupiter C.
Bacitas, Benjamin C.
Crisologo, Buddy L.
Salazar, Lancer James L.
Submitted to:
Rosfe Corlae D. Badoy, CPA, Ph.D.
August 2, 2014
I. Statement of the Problem
The financial statements of Amfac Inc. are given below:
AMFAC INC.
Balance Sheet
As of December 31, XXXX
Assets
Cash 8,000
Accounts Receivable, net 36,000
Merchandise Inventory 40,000
Prepaid Expenses 2,000
Plant and Equipment, net 214,000
Total Assets 300,000
Liabilities & Equities
Current Liabilities 30,000
Long-term Liabilities 60,000
Preferred Stock 50,000
Common Stock, $10 par 30,000
Retained Earnings 120,000
Total Liabilities & Equity 300,000
AMFAC INC.
Income Statement
For Year Ended December 31, XXXX
Sales 450,000
Cost of Goods Sold 270,000
Gross Margin 180,000
Operating Expenses 129,000
Net Operating Income 51,000
Interest Expense 6,000
Net Income before Taxes 45,000
Income Taxes (30%) 13,500
Net Income 31,500
Accounts receivable and inventory remained relatively constant during the year. Assets at the beginning of the year totalled $250,000 and the stockholders’ equity at the beginning of the year amounted to $180,000. Preferred stock did not change during the year. There are no convertible securities.
Analyze the financial statements of AMFAC Inc. taking into consideration the following:
a. Current Ratio
b. Acid Test Ratio
c. Debt-to-Equity Ratio
d. Accounts Receivable Turnover in Days
e. Inventory Turnover
f. Times Interest Earned
g. Return on Assets
h. Return on Common Stockholders’ Equity
II. Answers/Solutions
A. Current Ratio
=Current Assets/Current