166. Fellsmere Corporation
Presented below are the condensed balance sheets of Fellsmere Corporation at December 31, 2014 and 2013. Net income for the years ending December 31, 2014 and 2013 is $346,000 and $109,000, respectively.
December 31, 2014 December 31, 2013

Current assets $2,228,186 $2,544,683
Property, plant, & equipment (net) 530,589 376,647
Intangibles and other assets 131,206 118,121
Total assets $2,889,981 $3,039,451

Current liabilities $1,429,674 $1,003,906
Long-term obligations 3,360 7,240
Warranty and other liabilities 112,971 98,081
Total liabilities $1,546,605 $1,109,227
Stockholders' equity:
Common stock $ 1,566 $ 501,631
Additional paid-in capital 365,986 799,483
Retained earnings 980,509 634,509
Accumulated other comprehensive loss (4,085) (5,489)
Total stockholders' equity $1,343,976 $1,930,224
Total liabilities and stockholders' equity $2,889,981 $3,039,451


Read the information about Fellsmere Corporation.
Required:
(A) Did Fellsmere's current ratio increase or decrease from 2013 to 2014? Make any necessary calculations and explain your answer. Which financial statement users are most concerned with this ratio?
(B) The balance sheets show a large increase in retained earnings during 2014. Identify the possible reason(s) for this increase.



 
 
View Solution
 
 
 
<< Back Next >>