Chapter 1 Introduction to Accounting and Business EX 1-27 Ratio of liabilities to stockholders' equity Lowe's Companies Inc., a major competitor of The Home Depot in the home improve- ment business, operates over 1,800 stores. Lowe's recently reported the following balance sheet data (in millions): OBJ. 6 2: 5.01 REAL VORLD Year 2 Year 1 Total assets $35,291 $34,408 Total liabilities 29,418 27,974 FAI a. Determine the total stockholders' equity at the end of Years 2 and 1. b. Determine the ratio of liabilities to stockholders' equity for Year 2 and Year 1. Round to two decimal places. What conclusions regarding the risk to the creditors can you draw from (b)? C. d. Using the balance sheet data for The Home Depot in Exercise 1-26, how does the ratio of liabilities to stockholders' equity of Lowe's compare to that of The Home Depot? roblems: Series A OBJ, 4 PR 1-1A Transactions

Chapter 1 Introduction to Accounting and Business EX 1-27 Ratio of liabilities to stockholders' equity Lowe's Companies Inc., a major competitor of The Home Depot in the home improve- ment business, operates over 1,800 stores. Lowe's recently reported the following balance sheet data (in millions): OBJ. 6 2: 5.01 REAL VORLD Year 2 Year 1 Total assets $35,291 $34,408 Total liabilities 29,418 27,974 FAI a. Determine the total stockholders' equity at the end of Years 2 and 1. b. Determine the ratio of liabilities to stockholders' equity for Year 2 and Year 1. Round to two decimal places. What conclusions regarding the risk to the creditors can you draw from (b)? C. d. Using the balance sheet data for The Home Depot in Exercise 1-26, how does the ratio of liabilities to stockholders' equity of Lowe's compare to that of The Home Depot? roblems: Series A OBJ, 4 PR 1-1A Transactions

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter1: Introduction To Accounting And Business

Section: Chapter Questions

Problem 1.3ADM: Lowes: Ratio of liabilities to stockholders equity Lowes Companies, Inc., a major competitor to The...

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Lowes: Ratio of liabilities to stockholders equity Lowes Companies, Inc., a major competitor to The Home Depot in the home improvement retail business, operates over 1,800 stores. Lowe's recently reported the following end-of-year balance sheet data (in millions): Year 3 Year 2 Year 1 Total assets 32,732 32,666 33,559 Total liabilities 20,879 18,809 17,026 A. Determine the total stockholders equity at the end of Years 1, 2, and 3. B. Compute the ratio of liabilities to stockholders equity for all three years. (Round to two decimal places.) C. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years? D. Using the balance sheet data for Home Depot in ADM-2, how does Lowes ratio of liabilities to stockholders equity compare to that of Home Depot?
Home Depot: Ratio of liabilities to stockholders' equity The Home Depot, Inc., is the worlds largest home improvement retailer and one of the largest retailers in the United States based on sales volume. Home Depot operates over 2,200 stores that sell a wide assortment of building, home improvement, and lawn and garden items. Home Depot recently reported the following end-of-year balance sheet data (in millions): Year 3 Year 2 Year 1 Total assets 40,518 41,804 40,518 Total stockholders equity 12,522 17,777 17,898 A. Determine the total liabilities at the end of Years 1, 2, and 3. B. Compute the ratio of liabilities to stockholders equity for all three years. (Round to two decimal places.) C. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years?
Ratio of liabilities to stockholders' equity The Home Depot, Inc., is the world's largest home improvement retailer and one of the largest retailers in the United States bused on sales volume. The Home Depot operates over 2,200 Home Depot stores that sell a wide assortment of building materials and home improvement and lawn and garden products. The Home Depot recently reported the following balance sheet data (in millions). Year 2 Year 1 Total assets 40,518 40,125 Total stockholders' equity 22,620 21,236 a. Determine the total liabilities at the end of Years 2 and 1 b. Determine the ratio of liabilities to stockholders equity for Year 2 and Year1 Round to two decimal places. c. What conclusions regarding the margin of protection to the creditors can you draw from (b)?
Ratio of liabilities to stockholders equity The Home Depot, Inc., is the worlds largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Home Depot operates over 2,200 Home Depot stores that sell a wide assortment of building materials and home improvement and lawn and garden products. The Home Depot recently reported the following balance sheet data (in millions): a. Determine the total liabilities at the end of Years 2 and 1. b. Determine the ratio of liabilities to stockholders equity for Year 2 and Year 1. Round to two decimal places. c. What conclusions regarding the margin of protection to the creditors can you draw from (b)?
Multiple-step income statement and balance sheet The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 20Y2: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of stockholders equity. Additional common stock of 75,000 was issued during the year ended May 31, 20Y2. 3. Prepare a balance sheet, assuming that the current portion of the note payable is 50,000. 4. Briefly explain how multiple and single-step income statements differ.
Analyze Lowes for three years Lowes Companies, Inc. (LOW), a major competitor to The Home Depot, Inc. (HD) in the home improvement retail business, operates over 1,800 stores. Lowes recently reported the following end-of-year balance sheet data (in millions): a. Compute the ratio of liabilities to stockholders equity for all three years. Round to two decimal places. b. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years?
Multiple-step income statement and balance sheet The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 20Y7: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of stockholders equity. Additional common stock of 7,500 was issued during the year ended June 30, 20Y7. 3. Prepare a balance sheet, assuming that the current portion of the note payable is 7,000. 4. Briefly explain how multiple and single-step income statements differ.
Brief Exercise 1-24 The Accounting Equation Financial information for three independent cases is as follows: The liabilities of Dent Company are $82,000, and its stockholders' equity is $120,000. What is the amount of Dents total assets? The total assets of Wayne Inc. are $55,000, and its stockholders' equity is $22,500. What is the amount of Waynes total liabilities? Gordon Companys total assets increased by $60,000 during the year, and its liabilities decreased by $35,000. Did Gordons stockholders' equity increase or decrease? By how much? Required: Determine the missing amount for each case.
Problem 1-56A Applying the Fundamental Accounting Equation At the beginning of 2019 Huffer Corporation had total assets of $232,400 total liabilities of $94,200 common stock of 5501000. and retained earnings of $88,200. During 2019, Huffer had net income of $51,1501 paid dividends of 510,000. and issued additional common stock for $15,000. Huffers total assets at the end 01'2019 were $285,500. Required: Calculate the amount of liabilities that Huffer must have at the end of 2019 m order for the balance sheet equation to balance.
Accounting equation The total assets and total liabilities (in millions) of Dollar Tree Inc. and Target Corporation follow: Dollar Tree Target Assets 2,772 44,553 Liabilities 1,601 28,322 Determine the stockholders equity of each company.
Financial statements The assets and liabilities of Global Travel Agency on December 31, 20Y5, and its revenue and expenses for the year are as follows: Common stock was 525,000 and retained earnings was 1,250,000 as of January 1, 20Y5. During the year, additional common stock of 50,000 was issued for cash, and dividends of 90,000 were paid. Instructions 1. Prepare an income statement for the year ended December 31, 20Y5. 2. Prepare a statement of stockholders equity for the year ended December 31, 20Y5. 3. Prepare a balance sheet as of December 31, 20Y5. 4. What items appears on both the statement of stockholders equity and the balance sheet?
Single-step income Statement and balance sheet Selected accounts and related amounts for Kanpur Co. for the fiscal year ended June 30. 20Y7. arc presented in Problem 5-5B. Instructions 1.Prepare a single-step income statement in the format shown in Exhibit 13. 2.Prepare a statement of stockholders equity. Additional common stock of 7.500 was issued during the year ended June 30. 20Y7. 3.Prepare a balance sheet, assuming that the current portion of the note payable is 7,000. 4.Prepare closing entries as of June 30, 20Y7.