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# Instructions for the Microsoft Excel Templates This workbook (and only this workbook) should be submitted for

grading. Assignment detail and information is contained within this workbook. You should enter your name into the cell at the top of the page. Each worksheet contains the identification of the problem or exercise. In general, the yellow highlighted cells are the cells which work and effort should be presented. All formatting should have been accomplished to provide satisfactory presentation. See the text for additional assistance in formatting.

Place the proper title in the cell where the word "Text title" appears on the template. Place the value in the cell where the word "Value" or "Amount" appears on the template. A formula may be placed in some of these cells. Write a formula into cells where the word "Formula" appears. In these cells, an amount calculated can be entered. An amount can be placed in these cells. The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required.

The problem is formatted for whole dollars with comma separations (no cents) except where requ Negative values may be shown as (\$400) or -\$400. Consider using "Split" panes to assist in copy and paste of data. Much of the exercises and problems can have data entered by the "look to" or "=A34" type formula where cell A34 contains the data to be entered. This precludes typing and

uld be presented.

mode as required.

## ) except where required.

Team #: Problem: W5-T1, Time Value Concepts Applied to Solve Business Problems (Chapter 6)
Instructions: Answer the following questions related to Mathis, Inc. Part (a) Mathis, Inc. has \$572,000 to invest. The company is trying to decide between two alternative uses of funds. One alternative provides \$80,000 at the end of each year for 12 years, and the other is to receive a single lump sum payment of \$1,900,000 at the end of 12 years. Which alternative should Mathis select? Assume the interest rate is constant over the entire investment.

## Enter calculations and solution below: Alternative #1

Alternative #2

Part (b) Mathis, Inc. has completed the purchase of new computers. The fair market value of the equipment is \$824,150. The purchase agreement specifies an immediate down payment of \$200,000 and semiannual payments of \$76,952 beginning at the end of 6 months for 5 years. What is the interest rate, to the nearest percent, used in discounting this purchase transaction?

## Enter calculations and solution below:

Part (c) Mathis, Inc. loans money to Lee Beasley Corporation in the amount of \$600,000. Mathis accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of interest for 2 years), Mathis needs money and therefore sells the note to First National Bank, which demands interest on the note of 10% compounded semiannually. What is the amount Mathis will receive on the sale of the note?

Part (d) Mathis Inc. wishes to accumulate \$1,300,000 by December 31, 2020, to retire bonds outstanding. The company deposits \$300,000 on December 31, 2010, which will earn interest at 10% compounded quarterly, to help in the retirement of this debt. In addition, the company wants to know how much should be deposited at the end of each quarter for 10 years to ensure that \$1,300,000 is available at the end of 2020. (This quarterly deposits will also earn at a rate of 10%, compounded quarterly.) (Round to even dollars).

## 600,000. Mathis After 2 years ells the note to

Team #: Problem:

W5-T2 Statement of Cash Flows - Direct and Indirect Methods, (Chapter 23)

The comparative balance sheets and income statement for Ricci Corporation show the following information: March 31 2010 2009 Cash \$35,750 \$20,000 Accounts receivable 82,500 58,000 Inventory 212,500 250,000 Plant Assets 600,000 502,000 Accumulated depreciation (150,000) (125,000) Prepaid expenses 11,250 7,000 Totals \$792,000 \$712,000 Accounts payable Salaries payable Interest payable Bonds payable Common stock. \$10 par Retained earnings Totals \$125,500 49,250 29,250 70,000 370,000 148,000 \$792,000 \$115,000 72,000 25,000 100,000 280,000 120,000 \$712,000

Ricci Corporation Income Statement For the Year Ended March 31, 2010 Sales Cost of goods sold Gross margin Expenses Salary expense Interest expense Other expenses Depreciation expense Total Expenses Operating Income Income tax expense \$ 1,258,250 725,000 533,250

## 251,100 74,000 7,150 25,000 357,250 176,000 43,000

Net income

133,000

The following is additional information concerning Ricci's transactions during the year ended March 31, 2010. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing \$98,000 were purchased by paying \$48,000 in cash and issuing 5,000 shares of stock. 4. The "other expenses" are related to prepaid items. 5. All income taxes incurred during the year were paid during th year. 6. In order to supplement its cash, Ricci issued 4,000 shares of common stock at par value. 7. There were no penalties assessed for the retirement of bonds. 8. Cash dividends of \$105,000 were declared and paid at the end of the fiscal year. Instructions: (a) Compare and contrast the direct and the indirect method for reporting cash flows from operating actitivies.

Instructions: Prepare a statement of cash flows for Ricci Corporation for the year ended March 31, 2010, using the direct method. Be sure to support the statement with appropriate calculations. (A reconciliation of net income to net cash provided is not required.

RICCI CORORATION Statement of Cash Flows For the Year Ended March 31, 2010 Cash flows from operating activities Cash received from customers Cash paid Text Text Text Text Text Net cash provided by operating activities Cash flows from investing activities Text Net cash used by investing activities Cash flows from financing activities Text Text Text Net cash used by financing activities Increase in cash Cash, April 1, 2009 Cash, March 31, 2010 Note 1: Text

Amount

## Supporting Calculations: Collections from customers Sales Text

Amount \$0

Cash collected from customers Cash paid to suppliers Cost of merchandise sold Text Text Cash paid to suppliers Cash paid to emloyees Text Text Cash paid to emloyees Cash paid for other expenses Text Text Cash paid for other expenses Cash paid for Interest Text Text Cash paid for Interest

Formula

## Amount Amount Formula

Cash paid for income taxes Text Cash paid for income taxes

Amount Formula

Instructions: Using the indirect method, calculate only the net cash flow from operating activities for Ricci Corporation for th year ended March 31, 2010 RICCI CORPORATION Statement of Cash Flows For the Year Ended March 31, 2010 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Text

Amount

Text Text Text Text Text Text Net cash provided by operating activities

ct Methods,

at par value.

Amount

Formula Formula

Formula

Amount

Formula Formual