Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 26BE
1(a)
To determine
Compute
1(b)
To determine
Compute quick ratio of Incorporation MAR for the current year.
1(c)
To determine
Compute cash conversion cycle of Incorporation MAR for the current year.
1(d)
To determine
Compute
1(e)
To determine
Compute inventory turnover of Incorporation MAR for the current year.
1(f)
To determine
Compute gross profit percentage of Incorporation MAR for the current year.
1(g)
To determine
Compute net income percentage of Incorporation MAR for the current year.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Learning Objective 5: Evaluate collectibility using the allowance for uncollectibleaccounts) At the end of the current year (before adjusting entries), Autumn Corporation hada balance of $76,000 in Accounts Receivable and a credit balance of $11,000 in Allowance forUncollectible Accounts. Service revenue (all on credit) for the year totaled $490,000.RequirementsConsider each of the following two independent situations.1. Using the percent-of-sales method, calculate the amount of Uncollectible-Account Expenseif Autumn Corporation estimates its uncollectible-account expense using a rate of 2% ofcredit sales. What is the ending balance of the Allowance for Uncollectible-Accounts underthis scenario?2. Now assume that Autumn Corporation uses the aging-of-receivables method. AutumnCorporation estimates that its Allowance for Uncollectible Accounts should have a creditbalance of $21,000. Calculate the amount of its Uncollectible-Account Expense. What isthe ending balance of the Allowance for…
P5-63A (Learning Objectives 2, 3, 4: Apply GAAP for revenue, receivables, collections, and uncollectibles using the percent-of-sales method) This problem takes you through the accounting for sales, receivables, and uncollectibles for Quick Mail Corp., the overnight shipper. By selling on credit, the company cannot expect to collect 100% of its accounts receivable. At July 31, 2012, and 2013, respectively, Quick Mail Corp. reported the following on its balance sheet (in millions of dollars): July 31, 2013 2012 Accounts receivable. Less: Allowance for uncollectible accounts. . $3,690 (119) $3,430 (160) $3,270 Accounts receivable, net $3,571 During the year ended July 31, 2013, Quick Mail Corp. earned service revenue and collected cash from customers. Assume uncollectible-account expense for the year was 4% of service revenue and that Quick Mail wrote off uncollectible receivables. At year-end, Quick Mail ended with the foregoing July 31, 2013, balances. • Requirements 1. Prepare…
(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales returns and allowances) Dearborn Industries sells to wholesalers. Customers mustpay within 15 days or at the point of sale using a credit card. Dearborn’s cost of goods sold is35% of sales. The company had the following selected transactions during March:March 3 Sold $25,000 of merchandise to Greenleaf Company on account.Sold $4,000 of merchandise to Yardley Corp., who paid by credit card. The creditcard company charges Dearborn a fee of 2% on credit card sales.March 4March 15 Greenleaf Company paid the balance of what it owed for the purchase on March 3.March 19 Sold $12,000 of merchandise to Zurich Co. on account.March 21 Zurich reported that some of the merchandise received was scratched and returned$500 worth of merchandise to Dearborn.March 23 Sold $38,000 of merchandise to Niles Co. on account.March 25 Zurich paid the balance of what it owed for the purchase on March 19.March 31 Dearborn made…
Chapter 12 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 12 - Prob. 1DQCh. 12 - Which amount is the base amount for vertical...Ch. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - How would you expect a recession to affect asset...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1SCCh. 12 - Prob. 2SCCh. 12 - Prob. 3SCCh. 12 - Prob. 4SCCh. 12 - Prob. 5SCCh. 12 - Prob. 6SCCh. 12 - Prob. 7SCCh. 12 - Prob. 8SCCh. 12 - Prob. 9SCCh. 12 - Prob. 10SCCh. 12 - Prob. 11SCCh. 12 - Prob. 12SCCh. 12 - Prob. 1SECh. 12 - Prob. 2SECh. 12 - Prob. 3SECh. 12 - Prob. 4SECh. 12 - Prob. 5SECh. 12 - Prob. 6SECh. 12 - Prob. 7SECh. 12 - Prob. 8SECh. 12 - Prob. 9SECh. 12 - Prob. 10SECh. 12 - Prob. 11AECh. 12 - Prob. 12AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 14AECh. 12 - Prob. 15AECh. 12 - Prob. 16AECh. 12 - Prob. 17AECh. 12 - Prob. 18AECh. 12 - Prob. 19AECh. 12 - Prob. 20AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 22BECh. 12 - Prob. 23BECh. 12 - Prob. 24BECh. 12 - Prob. 25BECh. 12 - Prob. 26BECh. 12 - Prob. 27BECh. 12 - Prob. 28BECh. 12 - Prob. 29BECh. 12 - Prob. 30BECh. 12 - Prob. 31APCh. 12 - Prob. 32APCh. 12 - Prob. 33APCh. 12 - Prob. 34APCh. 12 - Prob. 35APCh. 12 - Prob. 36APCh. 12 - Prob. 37BPCh. 12 - Prob. 38BPCh. 12 - Prob. 39BPCh. 12 - Prob. 40BPCh. 12 - Prob. 41BPCh. 12 - Prob. 42BPCh. 12 - Prob. 1CECh. 12 - Prob. 1CPCh. 12 - Prob. 1EIACh. 12 - Prob. 2EIACh. 12 - Prob. 1FACh. 12 - Prob. 1IACh. 12 - Prob. 1SBACh. 12 - Prob. 1WC
Knowledge Booster
Similar questions
- (Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales returns and allowances) Treno Industries sells to wholesalers. Customers must paywithin 15 days or at the point of sale using a credit card. Treno’s cost of goods sold is 40% ofsales. The company had the following selected transactions during March:March 3 Sold $15,000 of merchandise to Whittier Company on account.Sold $2,000 of merchandise to Yeller Corp., who paid by credit card. The creditcard company charges Treno a fee of 2% on credit card sales.March 4March 15 Whittier Company paid the balance of what it owed for the purchase on March 3.March 19 Sold $22,000 of merchandise to Zucca Co. on account.March 21 Zucca reported that some of the merchandise received was scratched and returned$1,000 worth of merchandise to Treno.March 23 Sold $32,000 of merchandise to Nichols Co. on account.March 25 Zucca paid the balance of what it owed for the purchase on March 19.March 31 Treno made the adjusting…arrow_forward(Learning Objectives 1, 2, 3: Apply GAAP for sales, sales returns, and salesdiscounts) Antique Interiors reported the following transactions in October:Oct 210111519Sold merchandise on account to Tim Hinkel, $1,200, terms 1/10, n/30.Sold merchandise on account to Ben Homan, $2,600, terms 2/10, n/30.Collected payment from Hinkel for the October 2 sale.Homan returned $2,000 of the merchandise purchased on October 10.Collected payment from Homan for the balance of the October 10 sale.Requirements1. Record the foregoing transactions in the journal of Antique Interiors using the grossmethod. (You do not need to make the cost of sales journal entries; assume that these entrieswill be made by the company when it makes its other adjusting entries at period end.)2. Calculate the amount of gross sales minus sales discounts for the month of October.arrow_forward(Learning Objectives 1, 2, 3: Apply GAAP for sales, sales returns, and salesdiscounts) Pastel Interiors reported the following transactions in June:June 210111519Sold merchandise on account to Elisa Birch, $700, terms 1/10, n/30.Sold merchandise on account to Melissa Movens, $2,400, terms 1/10, n/30.Collected payment from Elisa Birch for June 2 sale.Movens returned $1,400 of the merchandise purchased on June 10.Collected payment from Movens for the balance of the June 10 sale.Requirements1. Record the foregoing transactions in the journal of Pastel Interiors using the gross method.(You do not need to make the cost of sales journal entries; assume that these entries will bemade by the company when it makes its other adjusting entries at period end.)2. Calculate the amount of gross sales minus sales discounts for the month of Junearrow_forward
- E5-13A. (Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales allowances) Lakewood Jewelry sells to retailers who then resell the products.Lakewood does not offer sales discounts for early payment; it asks that customers pay infull within 15 days or at the point of sale with a credit card. The company had the followingselected transactions during July:July 2July 3July 16July 17July 19July 30Sold $50,000 of merchandise to Oceanside Jewels on account.Sold $10,000 of merchandise to Brilliant Crystals, which paid by credit card.The credit card company charges Lakewood a fee of 2% on credit card sales.Oceanside Jewels paid the balance of what it owed for the purchase on July 2.Sold $65,000 of merchandise to Precious Stones on account.Precious Stones noticed that some of the merchandise received was damaged, so itreturned $5,000 worth of merchandise to Lakewood.Precious Stones paid the balance of what it owed for the purchase on July 17.Requirements1.…arrow_forwardLearning Objective 3: Purchase inventory, accrue interest, and pay a short-termnote) On August 1, 2019, The Shoppes at Mill Lake, Inc., purchased inventory costing $40,000by signing a 6%, six-month, short-term note payable. The company will pay the entire note(principal and interest) on the note’s maturity date.Requirements1. Journalize the company’s purchase of inventory.2. Make the adjusting entry for accrual of interest on the note payable on December 31, 2019.3. At December 31, 2019, what is reported on the balance sheet related to this note payable?4. Record the payment of the note payable (principal and interest) on its maturity datearrow_forward(Learning Objective 7: Calculate return on assets) Hometown Supply Companyreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$84,000$ 4,200$70,000$82,600$ 4,050$69,450Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forward
- (Learning Objective 5: Evaluate collectibility using the allowance for uncollectibleaccounts) During its first year of operations, Spring Garden, Inc., had sales of $439,000, all onaccount. Industry experience suggests that Spring Garden’s uncollectibles will amount to 4% ofcredit sales. At December 31, 2018, accounts receivable total $59,000. The company uses theallowance method to account for uncollectibles.1. Make Spring Garden’s journal entry for uncollectible-account expense using thepercent-of-sales method.2. Show how Spring Garden should report accounts receivable on its balance sheet atDecember 31, 2018.arrow_forward(Learning Objectives 4, 5: Compute gross profit; estimate inventory using the grossprofit method) Cleveland Company, a camera store, lost some inventory in a fire on October15. To file an insurance claim, the company must estimate its October 15 inventory using thegross profit method. For the past two years, Cleveland Company’s gross profit has averaged41% of net sales. Its inventory records reveal the following data:Inventory, October 1................ $ 57,700Transactions October 1–15:Purchases ................................. 490,800Purchase discounts................... 17,000Purchase returns....................... 70,900Sales......................................... 660,000Requirements1. Estimate the cost of the lost inventory using the gross profit method.2. Prepare the income statement for October 1 to October 15 for this product through grossprofit. Show the detailed computations of cost of goods sold in a separate schedule.arrow_forward(Learning Objective 3: Purchase inventory, accrue interest, and pay a short-termnote) On September 1, 2019, The Shoppes at Forest Lake, Inc., purchased inventory costing$63,000 by signing an 8%, six-month, short-term note payable. The company will pay the entirenote (principal and interest) on the note’s maturity date.Requirements1. Journalize the company’s purchase of inventory.2. Make the adjusting entry for accrual of interest on the note payable on December 31, 2019.3. At December 31, 2019, what is reported on the balance sheet related to this note payable?4. Record the payment of the note payable (principal and interest) on its maturity datearrow_forward
- (Learning Objective 7: Calculate return on assets) Handley Grocery Corporationreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$50,000$ 2,200$40,000$48,350$ 2,100$39,300Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forward(Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Spear Corporation’s inventory records for its retail division show thefollowing at May 31:May 1 Beginning inventory ............... 10 units @ $160 = $1,60015 Purchase................................. 5 units @ 161 = 80526 Purchase................................. 14 units @ 170 = 2,380At May 31, 11 of these units are on hand. Journalize the following for Spear Corporation underthe perpetual system:1. Total May purchases in one summary entry. All purchases were on credit.2. Total May sales and cost of goods sold in two summary entries. The selling price was $560per unit, and all sales were on credit. Assume that Spear uses the FIFO inventory method.3. Under FIFO, how much gross profit would Spear earn for the month ending May 31? Whatis the FIFO cost of Spear Corporation’s ending inventory?arrow_forward(Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Griffin Company’s inventory records for its retail division show thefollowing at December 31:Dec 1 Beginning inventory ............... 9 units @ $165 = $1,48515 Purchase................................. 5 units @ 166 = $ 83026 Purchase................................. 13 units @ 175 = $2,275At December 31, 11 of these units are on hand. Journalize the following for Griffin Companyunder the perpetual system:1. Total December purchases in one summary entry. All purchases were on credit.2. Total December sales and cost of goods sold in two summary entries. The selling price was$500 per unit, and all sales were on credit. Assume that Griffin uses the FIFO inventorymethod.3. Under FIFO, how much gross profit would Griffin earn for the month ending December 31?What is the FIFO cost of Griffin Company’s ending inventory?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning