Posted: May 8th, 2015

Week 4

Paper, Order, or Assignment Requirements

A) The following (given in scrambled order) are accounts and balances from the accounting records of Alleg, Inc., as of December 31, 2012, after the books were closed for the year. 

Common stock, authorized 21,000 share 
At $1 par value, issued 12,000 shares $12,000 
Additional paid-in capital 38,000 
Cash 14,000 
Marketable securities 17,000 
Accounts receivable 26,000 
Accounts Payable 16,000 
Current maturities of long-term debt 11,000 
Mortgages payable 80,000 
Bonds payable 65,000 
Inventory 33,000 
Land and buildings 57,000 
Machinery and equipment 120,000 
Goodwill 13,000 
Patents 9,000 
Other assets 45,000 
Deferred income taxes (long-term liability) 18,000 
Retained earnings 33,000 
Accumulated depreciation 61,000 

Bonds and mortgages generally have 10-30 years until maturity. Marketable securities are short-term investments that can be converted to cash in a matter of minutes. 

Required: 

1.Prepare a classified balance sheet with a proper heading on a spreadsheet. For assets, use the classifications of current assets, plant and equipment, intangibles, and other assets. For liabilities, use the classifications of current liabilities and long-term liabilities.

2.Compute the total asset turnover rate assuming that total revenues in 2012 were $682,500. Round to the nearest hundredth, e.g. 3.33.

3.Assume that Alleg’s primary competitor has an asset turnover of 2.12. What does this tell you about Alleg’s asset management?