need solution Shown below are selected data from the financial statements of Ahmed Stores, a retail lighting store:From the balance sheet:Cash ..Accounts receivableInventory . .Plant assets (net of accumulated depreciation)Current liabilitiesTotal stockholders' equity$ 5,00015,000.25,00050,00010,00050,0001,30,000Total assets.From the income statement:Net sales...Cost of goods soldOperating expenses.Interest expenseIncome tax expense.Net income$2,40,0001,80,00049,5008,0004,00021,000From the statement of cash flows:Net cash provided by operating activities(including interest paid of $7,000).Net cash used in investing activities .Financing activities:Amounts borrowed..Repayment of amounts borrowed .Dividends paid..Net cash provided by financing activities.Net increase in cash during the year. .$ 5,000(5,000)$ 5,000(2,000)(2,000)8,000$ 4,000Instructionsa. Compute the following (round to one decimal place):1. Current ratio 3. Working capital2. Quick ratio 4. Debt ratiob. Comment on these measurements and evaluate Ahmed's short-term debt-paying ability.c. Compute the following ratios (assume that the year-end amounts of total assets and total stockholders' equity also represent the average amounts throughout the year):1. Return on assets2. Return on equityd. Comment on the company's performance under these measurements. Explain why the return onassets and returm on equity are so different?

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Instructions a. Compute the following (round to one decimal place): 1. Current ratio 3. Working capital 2. Quick ratio 4. Debt ratio b. Comment on these measurements and evaluate Ahmed's short-term debt-paying ability. c. Compute the following ratios (assume that the year-end amounts of total assets and total stock holders' equity also represent the average amounts throughout the year): 1. Return on assets 2. Return on equity

Instructions a. Compute the following (round to one decimal place): 1. Current ratio 3. Working capital 2. Quick ratio 4. Debt ratio b. Comment on these measurements and evaluate Ahmed's short-term debt-paying ability. c. Compute the following ratios (assume that the year-end amounts of total assets and total stock holders' equity also represent the average amounts throughout the year): 1. Return on assets 2. Return on equity

Financial Accounting

15th Edition

ISBN:9781337272124

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

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

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 21E

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The accounts and their balances in the ledger of Markeys Mountain Shop as of December 31, the end of its fiscal year, are as follows: Data for the adjustments are as follows. Assume that Markeys Mountain Shop uses the perpetual inventory system. a. Merchandise Inventory at December 31, 140,357. b. Store supplies inventory (on hand) at December 31, 540. c. Depreciation of building, 3,400. d. Depreciation of store equipment, 3,800. e. Salaries accrued at December 31, 1,250. f. Insurance expired during the year, 1,480. Required 1. Complete the work sheet after entering the account names and balances onto the work sheet. Ignore this step if using CLGL. 2. Journalize the adjusting entries. If using manual working papers, record adjusting entries on journal page 63.
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