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Zigs Industries had the following operating results for 2011: sales = $27,360; cost of goods sold = $19,260; depreciation expense = $4,860; interest expense = $2,190; dividends paid = $1,560. At the beginning of the year, net fixed assets were $16,380, current assets were $5,760, and current liabilities were $3,240. At the end of the year, net fixed assets were $20,160, current assets were $7,116, and current liabilities were $3,780. The tax rate for 2011 was 34 percent.

a. What is net income for 2011?

b. What is the operating cash flow for 2011?

c. What is the cash flow from assets for 2011? Is this possible? Explain.

d. If no new debt was issued during the year, what is the cash flow to creditors?

What is the cash flow to stockholders? Explain and interpret the positive and negative signs of your answers in (a) through (d).

Ziegler Corporation reports net income of $380,000 and a weighted-average of 200,000 shares of common stock outstanding for the year. Compute the earnings per share of common stock.

Ziad Company had a beginning inventory on January 1 of 150 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made.
Mar. 15 400 units at $23 ......Sept. 4 350 units at $26
July 20 250 units at $24 ......Dec. 2 100 units at $29
1,000 units were sold. Ziad Company uses a periodic inventory system.

Instructions
(a) Determine the cost of goods available for sale.
(b) Determine
(1) The ending inventory,
(2) The cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods.
(c) Which cost flow method results in
(1) The highest inventory amount for the balance sheet,
(2) The highest cost of goods sold for the income statement?

Zhou Bicycle Company ( ZBC), located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981 by University of Washington Professor Yong- Pin Zhou, the firm’s primary retail outlets are located within a 400- mile radius of the distribution center. These retail outlets receive the order from ZBC within 2 days after notifying the distribution center, provided that the stock is available. However, if an order is not fulfilled by the company, no backorder is placed; the retailers arrange to get their shipment from other distributors, and ZBC loses that amount of business.

Develop an inventory plan to help ZBC.
Discuss ROPs and total costs.
How can you address demand that is not at the level of the planninghorizon?

Zhao Construction Components, Inc., purchased a machine on January 1, 2012, for $240,000. The chief engineer estimated the machine’s useful life to be six years and its salvage value to be zero. The operating cost of this machine is $120,000 per year. By January 1, 2014, a new machine that requires 30 percent less operating cost than the existing machine has become available for $180,000; it would have a four-year useful life with zero salvage. The current market value of the old machine on January 1, 2014, is $100,000, and its book value is $160,000 on that date. Straight-line depreciation is used for both machines. The company expects to generate $320,000 of revenue per year from the use of either machine.

Required
a. Recommend whether to replace the old machine on January 1, 2014. Support your answer with appropriate computations.
b. Prepare income statements for four years (2014 through 2017) assuming that the old machine is retained.
c. Prepare income statements for four years (2014 through 2017) assuming that the old machine is replaced.
d. Discuss the potential ethical conflicts that could result from the timing of the loss and expense recognition reported in the two income statements.

Zhao Company began operations when it acquired $40,000 cash from the issue of common stock on January 1, 2013. The cash acquired was immediately used to purchase equipment for $40,000 that had a $4,000 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $4,500 cash. Zhao uses straight-line depreciation.

Required
Prepare income statements, statements of changes in stockholders’ equity, balance sheets, and statements of cash flows for each of the fiveyears.

Zhang Company’s bank statement from Nguyen National Bank at August 31, 2014, shows the information below.

A summary of the Cash account in the ledger for August shows: balance, August 1, $10,959; receipts $50,050; disbursements $47,794; and balance, August 31, $13,215. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $3,200 and outstanding checks of $2,925. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that there were two errors involving company checks drawn in August: (1) A check for $340 to a creditor on account that cleared the bank in August was journalized and posted for $430. (2) A salary check to an employee for $275 was recorded by the bank for $277.

Instructions
(a) Prepare a bank reconciliation at August 31.
(b) Journalize the adjusting entries to be made by Zhang Company at August 31. Assume that interest on the note has not been accrued by thecompany.

Zhang Company issued $600,000 of 10-year, 7 percent bonds on January 1, 2013. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Zhang immediately invested the proceeds from the bond issue in land. The land was leased for an annual $110,000 of cash revenue, which was collected on December 31 of each year, beginning December 31, 2013.

Required
a. Prepare the journal entries for these events, and post them to T-accounts for 2013 and 2014.
b. Prepare the income statement, balance sheet, and statement of cash flows for 2013 and 2014.

Zhang Company has the following cash balances: Cash in Bank $15,742, Payroll Bank Account $6,000 and Plant Expansion Fund Cash $25,000 to be used two years from now. Explain how each balance should be reported on the balance sheet.

Zeus Investments Inc. is a regional investment company that began operations on January 1, 2014. The following transactions relate to trading securities acquired by Zeus Investments Inc., which has a fiscal year ending on December 31:

2014

Feb. 14. Purchased 4,800 shares of Apollo Inc. as a trading security at $26 per share plus a brokerage commission of $192.

Apr. 1. Purchased 2,300 shares of Ares Inc. as a trading security at $19 per share plus a brokerage commission of $92.

June 1. Sold 600 shares of Apollo Inc. for $32 per share less a $100 brokerage commission.

27. Received an annual dividend of $0.20 per share on Apollo Inc. stock.

Dec. 31. The portfolio of trading securities was adjusted to fair values of $33 and $18.50 per share for Apollo Inc. and Ares Inc., respectively.

2015

Mar. 14. Purchased 1,200 shares of Athena Inc. as a trading security at $65 per share plus a $120 brokerage commission.

June 26. Received an annual dividend of $0.21 per share on Apollo Inc. stock.

July 30. Sold 480 shares of Athena Inc. for $60 per share less a $50 brokerage commission.

Dec. 31. The portfolio of trading securities had a cost of $200,032 and a fair value of $188,000, requiring a credit balance in Valuation Allowance for Trading Investments of $12,032 ($200,032 2 $188,000). Thus, the debit balance from

December 31, 2014, is to be adjusted to the new balance.

Instructions

1. Journalize the entries to record these transactions.

2. Prepare the investment-related current asset balance sheet presentation for Zeus

Investments Inc. on December 31, 2015.

3. How are unrealized gains or losses on trading investments presented in the financial statements of Zeus Investments Inc.?