On January 1, 2021 Phillip Enterprises showed total assets of P5,000,000 and total liabilities and equity of P2,000,000 and P3,000,000 respectively. During the current year, he invested additional capital of P800,000 and withdraw funds amounting to P300,000. On December 31, 2021, total assets increased by P2,500,000 and total liabilities increased by P1,200,000. Calculate the profit for the current year.

On January 1, 2021 Phillip Enterprises showed total assets of P5,000,000 and total liabilities and equity of P2,000,000 and P3,000,000 respectively. During the current year, he invested additional capital of P800,000 and withdraw funds amounting to P300,000. On December 31, 2021, total assets increased by P2,500,000 and total liabilities increased by P1,200,000. Calculate the profit for the current year.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 52E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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Long-Term Financing Needed At year-end 2018, Wallace Landscapings total assets were 2.17 million, and its accounts payable were 560,000. Sales, which in 2018 were 3.5 million, are expected to increase by 35% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to 625,000 in 2018, and retained earnings were 395,000. Wallace has arranged to sell 195,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 45% of earnings will be paid out as dividends. a. What were Wallaces total long-term debt and total liabilities in 2018? b. How much new long-term debt financing will be needed in 2019? [Hint: AFN New stock = New long-term debt.)
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