SDC Accounting 302 - Assignment 2

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School

Excelsior University *

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Course

302

Subject

Accounting

Date

Apr 3, 2024

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pdf

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Uploaded by JudgeSteel13901

® Study.com Accounting 302 - Assignment 2: Ratio Analysis Problem Set If you have a Study.com College Saver membership and are seeking college credit for this course, you must complete three assignments and pass the proctored final exam. Please submit your assignments before registering for the final. Below you will find prompts and instructions for submitting Assignment 2. About this Assignment Ratio analysis is a type of financial statement analysis used to obtain a quick indication of an organization's financial performance in various key areas. This assignment will measure your understanding of ratio analysis and will mainly focus on the content of Chapters 4-7 and 9 from the course and the corresponding learning outcomes. Please note that you are required to complete all four of the following problem sets. You will need to utilize correct formulas, including headings, and to show how calculations are done. Before beginning the assignment, please read the rubric carefully to understand the expectations and how your work will be graded. Problem Sets Problem #1 Refer to Dino's information below and use formulas and figures to calculate the following ratios: * Working capital ratio e Quick ratio/acid test * Earnings per share * Price-earnings ratio * Debt-equity ratio ®* Return on equity For each ratio you calculate, include an explanation of the ratio resuits ana appiication to the specific business. Provide an analytic statement inVWlaidaybbetpyomeith todbydw the ratio can offect specific decisions that need to be made within theRggggnrgir%ation, including inventory management, depreciation of company assets, government texes, and investment prospects. Use 75-150 words for each ratio explanation.

Dinos After School Balance Sheet Dec 31 20XX Current Assets: Liabilities: Cash $2,500 Accts payable $6,000 Accts Receivable $9,000 Wages payable $1,000 inventory $2,000 Taxes payable $2,000 Supplies S500 Unearned revenue $4,000 ‘Marketable securities $10,000 Total Current assets $24,000 Total current liab $13,000 Long term liabilities: Mortgage payable $75,000 Bank note payable $20,000 Long term assets: Building $150,000 Total liabilities $108,000 Equipment $70,000 less: accumulated ($60,000) Owners equity depreciation Common stock $10,000 Retained Earnings $65,000 Total Long term assets $160,000 Total equity $76,000 Total assets $184,000 Total liabilities plus Additional information: owners equity $184,000 # of shares outstanding 10,000 share price $20 Net income $12,000 Dividends were .50 per share Problem #2 1. Using your own examples, please explain the differences between periodic and perpetual inventory systems. You may apply your examples to the case of Dino's After School. 2. Using your own examples please explain the differences between LIFO, FIFO, and Weighted Average as forms of inventory valuation. 3. On April 1, 2017 after the end of the first quarter, Dino's After School had $4,780 worth of inventory. On April 12, they purchased $6,000 more in inventory. Sales began to slow-down, so on May 12 they purchased only $2,000 worth of inventory. On June 20, with the start of summer and more customers making purchases, they purchased $9,000 more in inventory. They sold $17,500 worth of inventory during the Calculate the following: Read more * What is the ending inventory for Dino's After School at the end of June 2017? e |f there was no ending inventory from the first quarter, with the same levels of sales, what would have been the cost of goods sold during the second quarter?

Problem # 3 Dino's After School has an asset, a workstation where customers can find school homework assignments and hints for the correct answers. Its original cost was $12,705 and it has a salvage value of $1,400 and 7 years of useful life. 1. Calculate the annual depreciation expense under the straight-line method. 2. Then calculate the annual depreciation for each year (using the Double Declining Balance Method) and find the book value of the asset at the end of the 7th year. 3. Explain how the depreciation amount is included on the balance sheet, and why it is needed for the balance sheet. (Use 50-100 words) Problem # 4 Explain, in your own words, the concepts of adjustments and closing entries as covered in the Accounting 302 course. In your explanations, use examples (with nhumbers) to demonstrate your understanding of the concepts and how they relate. This section should include 200-300 words. Related Lessons The following specific lessons from the course may help you with this assignment. * Financial Statement Ratios: Determining Company Performance e Commonly Used Financial Ratios * What Is Debt Ratio? - Calculation & Overview ¢ Efficiency Ratios: Types & Formula ® |everage Ratios: Types & Formula Grading Rubric This assignment will be graded based on the following rubric: Needs Total Category Unacceptable Good Excellent Possible Improvement Points , The ratio , The ratio , The ratio : . calculations are : The ratio calculations are mostly correct and calculations are calculations are mostly incorrect correct and the : : : . Whheandlysip you with today? . : Financial incorrect or non- | and the analysis rovidesy?:;i)rll anal;%ls is logically 6 X Ratios existent and no provides almost qufiizléaﬂ y presented to analysis is clear demonstration | , ~ . _ | provide aclear provided. (0-1) of their usefulness :hcé;lrul;ls:;ljltr:;lslsu(l . demonstration of (2-3) 5) their usefulness (6)

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