Income Taxes

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ACG 2071 Managerial Accounting
Process Costing Systems
Minicase
Jeffersonian Corporation has been in business for over 50 years. The company is looking to expand operations into the Pacific Rim and would like an analysis of its financial statements to be prepared. Review the financial statements below:

Jeffersonian Corporation
Comparative Income Statement
For years ended December 31, 2011 and 2010
Sales
Cost of goods sold
Gross Profit
Operating Expenses
Salaries Expense
Contract Labor Expense
Insurance Expense
Supplies expense
Depreciation Expense
Miscellaneous expense
Marketing and Promotion expense
Total operating expenses
Operating Income
Interest expense
Income before taxes
Income taxes
Net Income

$
$
$

2011
2,486,000.00
1,523,000.00
963,000.00

$
$
$

2010
2,075,000.00
1,222,000.00
853,000.00

$
$
$
$
$
$
$
$
$
$
$
$
$

145,000.00
240,000.00
165,000.00
100,000.00
26,000.00
85,000.00
17,000.00
778,000.00
185,000.00
44,000.00
141,000.00
47,000.00
94,000.00

$
$
$
$
$
$
$
$
$
$
$
$
$

100,000.00
280,000.00
200,000.00
45,000.00
35,000.00
75,000.00
15,000.00
750,000.00
103,000.00
46,000.00
57,000.00
19,000.00
38,000.00

ACG 2071 Managerial Accounting
Process Costing Systems
Minicase

Jeffersonian Corporation
Comparative Balance Sheet
For years ended December 31, 2011 and 2010
2011
Assets
Current Assets
Cash
Marketable Securities
Accounts receivable
Merchandise inventory
Total current assets
Fixed Assets
Store Equipment, net
Office Equipment, et
Building, net
Land
Total fixed assets
Total assets
Liabilities
Current Liabilities
Accounts payable
Short term Liabilities
Taxes payable
Total current liabilities
Long-term liabilities
Mortgage payable
Total liabilities
Stockholder's Equity
Common Stock, $5 par value
Retained earnings
Total stockholder's equity
Total

2010

$
$
$
$
$

79,000.00
65,000.00
120,000.00
250,000.00
514,000.00

$
$
$
$
$

42,000.00
96,000.00
100,000.00
265,000.00
503,000.00

$
$
$
$
$
$

400,000.00
45,000.00
625,000.00
100,000.00
1,170,000.00
1,684,000.00

$
$
$
$
$
$

350,000.00
50,000.00
675,000.00
100,000.00
1,175,000.00
1,678,000.00

$
$
$
$

164,000.00
75,000.00
26,000.00
265,000.00

$
$
$
$

190,000.00
90,000.00
12,000.00
292,000.00

$
$

400,000.00
665,000.00

$
$

420,000.00
712,000.00

$
$
$
$

475,000.00
544,000.00
1,019,000.00
1,684,000.00

$
$
$
$

475,000.00
491,000.00
966,000.00
1,678,000.00

ACG 2071 Managerial Accounting
Process Costing Systems
Minicase
REQUIRED:
1. Prepare comparative income statements for year 2011 in comparison to year 2010. 2. Prepare common-size comparative balance sheet for years 2011 and 2010 3. Compute the following ratios for 2011.

Current ratio
Profit margin ratio
Acid-test ratio
Total asset turnover
Accounts receivable turnover
Return on total assets
Days’ sales uncollected
Earnings per share
Inventory turnover
Price earnings ratio
Debt-to-equity ratio
Dividend yield
Times interest earned

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