# The accounting department of your company has just delivered a draft of the current year's financial statements toyou. The summary is as follows:Total AssetsTotal LiabilitiesTotal EquityBeginning of the Year\$550,000210,000340,000End of the Year\$616,000211,000405,000Net Income for the YearCommon Shares Outstanding119,000121,00021,000You discovered that they have not adjusted for estimated bad debt expenses of \$8.200. For each of the followingratios, calculate1. The ratio that would have resulted had the error not been discovered (i.e. the incorrect ratio).2. The correct ratio.Incorrect:Correct:2 ROA3 ROE4 Debt Ratio5 EPS

Question
Asked Jan 31, 2019
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I need to gain understanding for an exam. Can you please provide me with ALL the steps for completing this problem. I know the ROA is net income / total assets however, I am getting it wrong.. Please help.

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Step 1

1.

Calculate the ratio that would have resulted had ther error not been discovered (Incorrect ratio) as shown below:

Step 2

2.

Calcualte the Correct ratio (after adjsting estimated bad debt expe...

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