Chapter 13: Quick Study

This set of Quick Study (QS) questions involves financial analysis and reporting tasks typically found in a financial accounting context. Here’s a brief overview of each question’s requirements: QS 13-1: Financial Reporting (C1) Determine if each item is part of general-purpose financial statements: • Examples: Income statement, balance sheet, financial statement notes, etc. QS 13-2: Standard of Comparison (C1) Identify the standard of comparison (a) intracompany, (b) competitor, (c) industry, or (d) guidelines for different comparison examples (e.g., comparing Ford’s return on assets with GM’s). QS 13-3: Percent Change (P1) Compute the prior year net income for Aveeno, given a 12% increase leading to $50,400 in current-year net income. QS 13-4 and QS 13-5: Horizontal Analysis (P1) Calculate the annual dollar and percent changes for provided account items. QS 13-6: Vertical Analysis (P2) Express items from QS 13-5 as common-size percentages. QS 13-7: Trend Percents (P1) Calculate trend percents for net sales, using the prior year as the base. QS 13-8: Common-Size Analysis (P2) Determine common-size percentages for cost of goods sold using net sales as the base. QS 13-9: Current Ratio and Acid-Test Ratio (P3) Calculate Pritchett Co.’s (a) current ratio and (b) acid-test ratio using provided current assets and liabilities. QS 13-10: Effect of Transactions on Current Ratio (P3) Analyze how various transactions (inventory acquisition, asset sale, accrued wages) affect total current assets, liabilities, and the current ratio. QS 13-11: Accounts Receivable Turnover and Days' Sales Uncollected (P3) Compute (a) accounts receivable turnover and (b) days’ sales uncollected for Mifflin Co., using the average accounts receivable and ending balance in accounts receivable. QS 13-12: Inventory Turnover and Days' Sales in Inventory (P3) Calculate (a) inventory turnover and (b) days' sales in inventory for SCC Co., using average inventory. QS 13-13: Total Asset Turnover (P3) Compute total asset turnover for Dundee Co., using net sales and average total assets. QS 13-14: Debt-to-Equity Ratio and Times Interest Earned (P3) Compute (a) debt-to-equity ratio and (b) times interest earned for Paddy’s Pub, using income and balance sheet data. QS 13-15: Profit Margin and Return on Total Assets (P3) Calculate (a) profit margin and (b) return on total assets for Edison Co. QS 13-16: Price-Earnings Ratio and Dividend Yield (P3) Compute (a) price-earnings ratio and (b) dividend yield for Franklin Co., based on net income, dividends, and share price data. QS 13-17: Ratio Interpretation (P3) Determine if the change in each ratio value from the prior year to the current year is generally favorable or unfavorable. QS 13-18: Ratio Analysis for Lending Decisions (P3) Analyze whether trends in various ratios (current, acid-test, times interest earned, and total asset turnover) would support or discourage a loan. QS 13-19: Ratio Analysis for Investing Decisions (P3) Assess trends (return on equity, days’ sales in inventory, profit margin, return on total assets) for investing decision implications. QS 13-20: Short-Term Financial Condition Analysis (A1) Compare Morgan Company and Parker Company on their ability to pay current liabilities, convert receivables to cash, and minimize inventory holding time. QS 13-21A: Identifying Unusual/Infrequent Gains or Losses (A2) Determine if certain scenarios (e.g., hurricane damage, asset sale loss, government asset seizure) should be reported as unusual or infrequent. QS 13-22A: Reporting a Discontinued Segment (A2) Prepare the discontinued segment portion of the income statement for Wipfli Co., reflecting the gain on sale and segment income. These exercises focus on understanding financial ratios, trend analysis, and special reporting situations critical in financial decision-making contexts.