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The Shannon Corporation deals in textile products. Due to certain reasons the company was closed and records of same are out of access now except given below. Use the given information to make balance sheet for year 2019
- Sales $750,000
- Total asset turnover 2.5 times
- Cash to total assets 2.0 percent
- Accounts Receivable Turnover 10.0 times
- Inventory turnover 15.0 times
- Current Ratio 2.0 times
- Debt to total assets 45.0 percent
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- Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A. A business depreciates a building with a book value of $12,000, using straight-line depreciation, no salvage value, and a remaining useful life of six years. B. An organization has a line of credit with a supplier. The company purchases $35,500 worth of inventory on credit. Terms of purchase are 3/20, n/60. C. An employee earns $1,000 in pay and the employer withholds $46 for federal income tax. D. A customer pays $4,000 in advance for legal services. The lawyer has previously recognized 30% of the services as revenue. The remainder is outstanding.Comprehensive: Income Statement and Retained Earnings Milwaukee Manufacturing Company presents the following partial list of account balances, after adjustments, as of December 31, 2019: The following information is also available but is not reflected in the preceding accounts: a. The company sold Division E (a major component of the company) on August 2, 2019. During 2019, Division E had incurred a pretax loss from operations of 16,000. However, because the acquiring company could vertically integrate Division E into its facilities, Milwaukee Manufacturing was able to recognize a 42,000 pretax gain on the sale. b. On January 2, 2019, without warning, a foreign country expropriated a factory of Milwaukee Manufacturing which had been operating in that country. As a result of that expropriation, the company has incurred a pretax loss of 30,000. c. The common stock was outstanding for the entire year. A cash dividend of 1.20 per share was declared and paid in 2019. d. The 2019 income tax expense totals 31,050 and consists of the following: Required: 1. As supporting documents for Requirement 2, prepare separate supporting schedules for selling expenses and for general and administrative expenses (include depreciation expense where applicable in these schedules). 2. Prepare 2019 multiple-step income statement for Milwaukee Manufacturing. 3. Prepare a 2019 retained earnings statement. 4. Next Level What was Milwaukee Manufacturings return on common equity for 2019 if its average shareholders equity during 2019 was 500,000? What is your evaluation of this return on common equity if its target for 2019 was 15%? 5. Next Level Discuss how Milwaukee Manufacturings income statement in Requirement 2 might be different if it used IFRS.
- Q: The Shannon corporation deals in textile products.Due to certain reasons the company was closed and records of same are out of access now except given below. Use the given information to make balance sheet for year 2019 d) Sales. $750,000 e) Total assets turnover 2.5 times f) Cash to total assets. 2.0 percent g) Accounts Receivable Turnover 10.0 times h) Inventory turnover 15.0 times i) Current Ratio 2.0 times j) Debt to total assets 45.0 percent Note : the other part is given below on the form of picture.Shown below is an income statement for 2020 that was prepared by a poorly trained bookkeeper of JensenCorporation. Jensen CorporationINCOME STATEMENTDecember 31, 2020 Sales revenue $945,000Investment revenue 19,500Cost of merchandise sold (408,500)Selling expenses (145,000)Administrative expense (215,000)Interest expense (13,000)Income before special items 183,000Special itemsLoss on disposal of a component of the business (30,000)Major casualty loss (extraordinary item) (70,000)Net federal income tax liability (???)Net income ???InstructionsPrepare a multiple-step income statement for 2020 for Jensen Corporation that is presented in accordance withgenerally accepted accounting principles (including format and terminology). Jensen Corporation has 50,000shares of common stock outstanding and has a 30% federal income tax rate on all tax related items. Round allearnings per share figures to the nearest cent.The following information is related to Vaughn Company for 2020. Retained earnings balance, January 1, 2020 $1,156,400 Sales Revenue 29,500,000 Cost of goods sold 18,880,000 Interest revenue 82,600 Selling and administrative expenses 5,546,000 Write-off of goodwill 967,600 Income taxes for 2020 1,467,920 Gain on the sale of investments 129,800 Loss due to flood damage 460,200 Loss on the disposition of the wholesale division (net of tax) 519,200 Loss on operations of the wholesale division (net of tax) 106,200 Dividends declared on common stock 295,000 Dividends declared on preferred stock 94,400 Vaughn Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Vaughn sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. Partially correct answer…
- Selected items from Lemus Enterprises 12-31-2019 and 12-31-2018, financial statements are presented below: 2019 2018 Accounts receivable $ 40,000 $ 36,000 Merchandise inventory $ 28,000 35,000 Net sales 190,000 186,000 Cost of goods sold 114,000 108,000 Total assets 425,000 405,000 Total shareholders' equity 240,000 225,000 Net income 32,500 28,000 Lemus's 2019 asset turnover is (rounded): Group of answer choices 3.73. 2.79. 2.24. 0.46.On December 1, 2022, Crane Company had the account balances shown below.Debit CreditCash $5,500 Accumulated Depreciation—Equipment $1,500Accounts Receivable 4,200 Accounts Payable 3,600Inventory 2,400 * Owner’s Capital 27,000Equipment 20,000$32,100 $32,100*(4,000 x $0.60)The following transactions occurred during December:Dec. 3 Purchased 4,200 units of inventory on account at a cost of $0.74 per unit.5 Sold 4,600 units of inventory on account for $0.90 per unit. (Crane sold 4,000 of the$0.60 units and 600 of the $0.74.)7 Granted the December 5 customer $201 credit for 200 units of inventory returnedcosting $134. These units were returned to inventory.17 Purchased 2,200 units of inventory for cash at $0.80 each.22 Sold 3,100 units of inventory on account for $0.95 per unit. (Crane sold 3,100 of the$0.74 units.On December 1, 2022, Crane Company had the account balances shown below.Debit CreditCash $5,500 Accumulated Depreciation—Equipment $1,500Accounts Receivable 4,200 Accounts Payable 3,600Inventory 2,400 * Owner’s Capital 27,000Equipment 20,000$32,100 $32,100*(4,000 x $0.60)The following transactions occurred during December:Dec. 3 Purchased 4,200 units of inventory on account at a cost of $0.74 per unit.5 Sold 4,600 units of inventory on account for $0.90 per unit. (Crane sold 4,000 of the$0.60 units and 600 of the $0.74.)7 Granted the December 5 customer $201 credit for 200 units of inventory returnedcosting $134. These units were returned to inventory.17 Purchased 2,200 units of inventory for cash at $0.80 each.22 Sold 3,100 units of inventory on account for $0.95 per unit. (Crane sold 3,100 of the$0.74 units. question a) Enter the December 1 balances in the ledger T-accounts and post the December transactions.(Post entriesin the order of journal entries presented above.)CashDec. 1…
- The following information is related to Sheridan Company for 2020. Retained earnings balance, January 1, 2020 $999,600 Sales Revenue 25,500,000 Cost of goods sold 16,320,000 Interest revenue 71,400 Selling and administrative expenses 4,794,000 Write-off of goodwill 836,400 Income taxes for 2020 1,268,880 Gain on the sale of investments 112,200 Loss due to flood damage 397,800 Loss on the disposition of the wholesale division (net of tax) 448,800 Loss on operations of the wholesale division (net of tax) 91,800 Dividends declared on common stock 255,000 Dividends declared on preferred stock 81,600 Sheridan Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Sheridan sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. (a1) Prepare a…Presented below is information related to Crane Company at December 31, 2020, the end of its first year of operations. Sales revenue $784,000 Cost of goods sold 374,000 Selling and administrative expenses 144,000 Unusual gain on sale of plant assets 71,000 Unrealized gain on available-for-sale investments 40,000 Interest expense 25,000 Loss on discontinued operations 47,000 Allocation to noncontrolling interest 113,000 Dividends declared and paid 19,000 Compute the following. Ignore income tax effects. (a) Income from operations $ (b) Net income $ (c) Net income attributable to Crane Company’s controlling stockholders $ (d) Comprehensive income $ (e) Retained earnings balance at December 31, 2020 $Swish Ltd has the following results for the year ended 31 March 2020. £ Net loss per Accounts (Note (1)) (116,500) Interest receivable 3,500 Chargeable gain 44,500 Notes (1) Net loss is after charging: £ Depreciation 10,800 Entertaining customers 1,200 (2) All other expenses are allowable for corporation tax. (3) The written down value of plant and machinery on the main pool at 1 April 2019 was £20,000. There were no purchases or sales during the year ended 31 March 2020. (4) Swish Ltd has…