Concept explainers
Using the
The balance sheet data for Angel’s Countertops, Inc., at August 31, 2018, and September 30, 2018, follow:
Aug 31, 2016 | Sep 30, 2018 | |
Total Assets................................................. | $105,000 | $180,000 |
Total Liabilities............................................. | 75,000 | 129,000 |
Common Stock............................................ | 10,000 | 10,000 |
Total Stockholders’ Equity........................... | ? | ? |
Requirement
The following are three independent assumptions about the business during September. For each assumption, compute the amount of net income or net loss during September 2018. Find the solution by preparing the statement of
- a. The business paid no dividends.
- b. The business paid $10,000 of dividends
- c. The business paid $16,000 of dividends.
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Financial Accounting, Student Value Edition (5th Edition)
- E1-24A. (Learning Objective 4: Construct a balance sheet) At December 31, 2018, LandyProducts has cash of $24,000, receivables of $18,000, and inventory of $80,000. The company’sequipment totals $182,000. Landy owes accounts payable of $22,000 and long-term notespayable of $172,000. Common stock is $34,500. Prepare Landy’s balance sheet at December 31,2018, complete with its proper heading. Use the accounting equation to compute retainedearnings.arrow_forwardS1-12. (Learning Objective 4: Construct an income statement) MacKensie ServicesCorporation began 2018 with total assets of $230 million and ended 2018 with totalassets of $365 million. During 2018, MacKensie earned revenues of $394 million and hadexpenses of $171 million. MacKensie declared and paid dividends of $27 million in 2018.Prepare the company’s income statement for the year ended December 31, 2018, completewith an appropriate heading.arrow_forwardE3-39B. (Learning Objective 6: Analyze and evaluate liquidity and debt-paying ability) BurnesConsulting Company reported these ratios at December 31, 2018 (dollar amounts in millions):Current ratio = $20 = 2.00 $10 $60 Debt ratio = = 0.50 $30Burnes Consulting completed these transactions during 2019:a. Purchased equipment on account, $4b. Paid long-term debt, $7c. Collected cash from customers in advance, $5d. Accrued interest expense, $6e. Made cash sales, $8Determine whether each transaction improved or hurt the company’s current ratio and debt ratio.arrow_forward
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