Reference no: EM13112728

1. 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. 

A.    Common stock, authorized 21,000 share

           At $1 par value, issued 12,000 shares                              $12,000

B.     Additional paid-in capital                                                       38,000

C.     Cash                                                                                     14,000

D.    Marketable securities                                                             17,000

E.     Accounts receivable                                                                26,000

F.      Accounts Payable                                                                   16,000

G.    Current maturities of long-term debt                                       11,000

H.    Mortgages payable                                                                   80,000

I.       Bonds payable                                                                        65,000

J.       Inventory                                                                               33,000

K.    Land and buildings                                                                   57,000

L.     Machinery and equipment                                                        120,000

M.   Goodwill                                                                                    13,000

N.    Patents                                                                                     9,000

O.    Other assets                                                                            45,000

P.      Deferred income taxes (long-term liability)                             18,000

Q.    Retained earnings                                                                    33,000

R.     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:

a. 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.

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

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

2. In 400-800 words, list the four components of GDP and provide an example of each, explaining how each item affects you and the way that you live today.