SFP is “balanced” as a consequence of double-entry accounting.
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A:
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True or False.
33. Payment for acquisition of merchandise inventory are reported as investing activities. *
43. A common-size Statement of Comprehensive Income that shows cost of goods sold at 45% means that cost of goods sold is 45% of sales. *
12. A net positive result of operations is called Net Income *
14. Real accounts can also be found in the SCI. *
20. Net Purchases is different from Net Cost of Purchases. *
26. The partnership net income is allocated to each partner’s capital using the
10. Contra assets are those accounts that are presented under the assets portion of the SFP but are reductions to the company’s assets. *
5. The SFP is “balanced” as a consequence of double-entry accounting. *
41. A common-size
36. Financial statement analysis uses computational and analytical techniques to evaluate the company’s risks, performance, financial health, and future prospects with the objective of making economic decisions. *
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- Revenue and expense data for Rogan Technologies Co. are as follows: 20Y8 20Y7 Sales $701,000 $610,000 Cost of goods sold 434,620 347,700 Selling expenses 105,150 103,700 Administrative expenses 119,170 122,000 Income tax expense 21,030 12,200 a. Prepare an income statement in comparative form, stating each item for both 20Y8 and 20Y7 as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as a positive number. Rogan Technologies Co. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7 20Y8 Amount 20Y8 Percent 20Y7 Amount 20Y7 Percent $fill in the blank 6de34503cfdf061_2 fill in the blank 6de34503cfdf061_3% $fill in the blank 6de34503cfdf061_4 fill in the blank 6de34503cfdf061_5% fill in the blank 6de34503cfdf061_7 fill in the blank 6de34503cfdf061_8% fill in the blank 6de34503cfdf061_9 fill in the blank 6de34503cfdf061_10% Gross profit $fill in the blank…Stockton Co. prepared its income statement containing the information below. Using vertical analysis, what percentages would apply to cost of sales, gross profit, and interest expense, respectively? Net Sales Revenue $ 649,000 Cost of Sales 431,000 Gross Profit 218,000 Operating and Other Expenses 88,500 Interest Expense 32,500 Income Tax Expense 35,500 Net Income $ 61,500 Cost of Sales Gross Profit Interest Expense A) 73.4 % 100.0 % 16.3 % B) 49.7 % 60.7 % 39.7 % C) 100.0 % 50.6 % 8.2 % D) 66.4 % 33.6 % 5.0 % Multiple Choice Option B Option C Option A Option DIncome statement information for Einsworth Corporation follows: Sales $442,000 Cost of goods sold 150,280 Gross profit 291,720 Prepare a vertical analysis of the income statement for Einsworth Corporation. If required, round percentage answers to the nearest whole number. Einsworth Corporation Vertical Analysis of the Income Statement Amount Percentage Sales $442,000 % Cost of goods sold 150,280 % Gross profit $291,720 %
- D. Return on Common Shareholders' Equity Net Income-preferred Dividends / Average Common Shareholders' Equity E. Accounts Receivables Turnover Net Credit Sales/Average Accounts Receivable F. Merchandise Inventory Turnover Cost of Goods Sold/ Average Inventory d. Return on Common Stockholders’ Equitye. Accounts Receivables Turnoverf. Merchandise Inventory TurnoverConsider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATIONIncome Statement Sales $ 42,900 Costs 33,900 Taxable income $ 9,000 Taxes (21%) 1,890 Net income $ 7,110 Dividends $ 3,400 Addition to retained earnings 3,710 The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.) HEIR JORDAN CORPORATION Balance Sheet Percentage of Sales Percentage of Sales Assets…Which of the following formula is correct for Gross Margin of a Merchandise Business under multi-step income statement? a. Net Sales less Cost of Merchandise sold b. Net Sales less Total Operating expenses c. Total Sales less Total expenses d. Gross Sales less Merchandise Inventory at the end of the year
- Financial Ratios The financial statements for Jackson Enterprises (income statement, statement of owner’s equity, and balance sheet) are shown. Jackson EnterprisesIncome StatementFor Year Ended December 31, 20-- Revenue from sales: Sales $170,000 Less: Sales returns and allowances 10,000 Net sales $160,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $7,700 Estimated returns inventory, January 1, 20-- 1,300 $9,000 Purchases $92,900 Less: Purchases returns and allowances $1,862 Purchases discounts 1,828 3,690 Net purchases $89,210 Add: Freight-in 961 Cost of goods purchased 90,171 Goods available for sale $99,171 Less: Merchandise inventory, Dec. 31, 20-- $8,300 Estimated returns inventory, Dec. 31, 20-- 1,200 9,500 Cost of goods sold 89,671 Gross profit…The income statements of Cullumber Corporation show the following amounts: 2020 2019 2018 Net sales $740 $710 $660 Cost of goods sold 540 509 449 Gross profit 200 201 211 Selling, general, and administrative expenses 190 150 110 Profit before tax 10 51 101 Using vertical (common-size) analysis, analyze Cullumber Corporation’s declining profit before tax. (Round answers to 0 decimal places, e.g. 52%.) 2020 2019 2018 Net sales % % % Cost of goods sold % % % Gross profit % % % Selling, general, and administrative expenses % % % Profit before tax % % %Fill in the appropriate blanks for each of the independent situations below. Company A Company B Company C Sales revenue $ $357,000 $543,000 Beginning inventory 52,100 86,500 Net purchases 191,800 254,200 Ending inventory 51,600 115,000 60,500 Cost of goods sold 416,000 Gross profit 87,200 141,800 Operating expenses 51,800 48,800 Income before taxes 18,700
- Required information E6-17 Analyzing Gross Profit Percentage on the Basis of a Multistep Income Statement [LO 6-6] [The following information applies to the questions displayed below.] The following data were provided by Mystery Incorporated for the year ended December 31: Cost of Goods Sold $ 175,000 Income Tax Expense 20,700 Merchandise Sales (gross revenue) for Cash 260,000 Merchandise Sales (gross revenue) on Credit 46,000 Office Expenses 20,000 Sales Returns and Allowances 7,650 Salaries and Wages Expense 44,200 E6-17 Part 1 Required: Prepare a multistep income statement.Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATIONIncome Statement Sales $ 47,600 Costs 35,600 Taxable income $ 12,000 Taxes (25%) 3,000 Net income $ 9,000 Dividends $ 3,000 Addition to retained earnings 6,000 The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.) HEIR JORDAN CORPORATION Balance Sheet Percentage of Sales Percentage of Sales Assets…Financial Ratios The financial statements for Jackson Enterprises (income statement, statement of owner’s equity, and balance sheet) are shown. Jackson EnterprisesIncome StatementFor Year Ended December 31, 20-- Revenue from sales: Sales $170,000 Less: Sales returns and allowances 10,000 Net sales $160,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $8,700 Estimated returns inventory, January 1, 20-- 1,300 $10,000 Purchases $92,940 Less: Purchases returns and allowances $1,850 Purchases discounts 1,802 3,652 Net purchases $89,288 Add: Freight-in 913 Cost of goods purchased 90,201 Goods available for sale $100,201 Less: Merchandise inventory, Dec. 31, 20-- $7,300 Estimated returns inventory, Dec. 31, 20-- 1,200 8,500 Cost of goods sold 91,701 Gross profit…
