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1.
Compute
2a.
Compute each of the same three ratios after, evaluating the effect of transaction of purchasing merchandise of $38,00 on account by debiting inventory.
2b.
Compute each of the same three ratios after, evaluating the effect of transaction of issued 1,000 shares of common stock, receiving cash of $85,000.
2c.
Compute each of the same three ratios after, evaluating the effect of transaction of borrowing $50,000 on a long term notes payable.
2d.
Compute each of the same three ratios after, evaluating the effect of transaction of receiving cash on account of $9,000.
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Chapter 12 Solutions
Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (4th Edition)
- (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_forwardGold Company's comparative balance sheet and income statement for last year appear below: Statement of Financial Position Ending Beginning Balance Balance Cash........................................................... $ 70,000 $ 38,000 Accounts receivable.................................. 76,000 52,000 Inventory.................................................... 24,000 42,000 Prepaid expenses....................................... 8,000 16,000 Long-term investments.............................. 260,000 210,000 Plant and equipment.................................. 530,000 510,000 Accumulated depreciation......................... ( 398,000) ( 350,000) Total assets................................................ $570,000 $518,000 Accounts payable....................................... $ 32,000 $ 54,000 Accrued…arrow_forwardThe following data were abstracted from the records of Ballistic Corporation for the year: Sales ................................................. $900,000 Bond interest expense ................................. 50,000 Income taxes .......................................... 200,000 Net income ............................................ 300,000 How many times was bond interest earned? a. 18.0 b. 15.0 c. 11.0 d. 10.0 could you please show me how to calculatearrow_forward
- Question Description The following income statement and selected balance sheet account data are available for Treece, Inc., at December 31, 2013 Revenue: Net sales………………………………………..$3,200,000 Interest income………………………………….. . 45,000 Gain on sale of marketable securities…….………...34,000 Total revenue…………………………………..$3,279,000 Costs and expenses: Cost of goods sold…………………………………………... $1,620,000 Operating expenses (including depreciation of $150,000)….1, 240,000 Interest expense…………………………………………….…...42,000 Income taxes…………………………………………….……....100,000 Loss on sale of plant Assets.....................................................…...12,000 Total Costs and expenses…………………………..………. $3,014,000 Net income………………………………………….…………. $260,000 Changes in the Company’s balance sheet accounts over the year are summarized as follows: Accounts receivable increased by $60,000 Accrued interest receivable decreased by $2,000 Inventory decreased by $60,000, and Account payable decreased by $16,000 Short term…arrow_forwardUsing the financial statements of Sultan Center in 2018, calculate the following ratios and interpret your results: current ratio calculations ........................ interpretation of results ....................... return on equity ratio calculations ....................... interpretation of results ...................... profit margin calculations ......................... interpretation of results ........................... debt to equity ratio calculations ............................ interpretation of results ............................ (financial statements listed below and also company website for more information) https://cis.boursakuwait.com.kw/Portal/FData/610_BL_2019_9_E_293202094434260.pdfarrow_forwardTrouble Company has provided the following data: Sales........................................................... $5,000,000 Interest expense......................................... $30,000 Total assets, beginning of year .................. $185,000 Total assets, end of year ............................ $215,000 Tax rate ...................................................... 30% Return on total assets ................................. 15.5% Tribble Company's net income was: A) $1,000 C) $22,000 B) $31,000 D) $10,000arrow_forward
- The following information came from a recent balance sheet of Apple Computer, Inc.:End of Year Beginning of YearAssets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53.9 billion $39.6 billionLiabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.0 billion ?Owners’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? $21.0 billiona. Determine the amount of total liabilities reported in Apple Computer ’s balance sheet at thebeginning of the year.b. Determine the amount of total owners’ equity reported in Apple Computer ’s balance sheet atthe end of the year.c. Retained earnings was reported in Apple Computer ’s year-end balance sheet at $19.5 billion.If retained earnings was $13.8 billion at the beginning of the year, determine net income forthe year if no dividends were declared.arrow_forward(Learning Objective 7: Calculate return on assets) Oscar Optical Corporation providesa full line of designer eyewear to consumers. Oscar reported the following information for 2018and 2017:2018 2017Sales revenue ...............................Net income..................................Average total assets.....................$500,000$ 43,700$230,000$410,000$ 34,650$210,000Compute return on assets (ROA) for 2018 and 2017. Using the DuPont model, identify thecomponents and state whether each improved or worsened from 2017 to 2018.arrow_forwardSelected data from Cattleya Corporation's financial statements follow: Current ratio .................................................................... 2.0 Acid-test ratio .................................................................. 1.5 Current liabilities ............................................................. P120,000 Inventory turnover ........................................................... 8 Gross profit margin as a percentage of sales ................... 40% The company has no prepaid expenses and there were no changes in inventories during the year. The Corporation's net sales for the year were: A) P800,000 B) P480,000 C) P1,200,000 D) P240,000arrow_forward
- Q#1 - The accrued interest is $ ……………………………………. . Q#2 - The total invoice price is $ …………………………………… .arrow_forwardThese account balances at December 31 relate to Sportplace, Inc.:Accounts Payable ........................ $ 51,700Accounts Receivable....................Common Stock ...........................81,050Treasury Stock ............................Bonds Payable .............................313,0005,7003,300Paid-in Capital in Excessof Par—Common................................. $240,000Preferred Stock, 10%, $100 Par................Retained Earnings.....................................Notes Receivable.......................................85,00071,90012,800Q10-62. What is total paid-in capital for Sportplace? (Assume that treasury stock does notreduce total paid-in capital.)a. $632,300b. $709,900c. $643,700d. $638,000e. None of the abovearrow_forwardRecord each of these transactions 1 Cash………………………………………. 300,000 Capital Stock…………………………………………… 300,000 Issued capital stock at $60 per share 4 Diagnostic Equipment……………………250,000 Cash………………………………………………… 100,000 Notes Payable……………………………………… 150,000 Purchased equipment, paying part in cash and signing a note payable for the balance 12 Account Payable…………….......6,000 Cash…………………………………. $6,000 Paid account payable to Zeller Laboratories 19 surgical supplies……………………4,000 Accounts Payable……………………… $ 4,000 25 Cash…………………..80,000 Accounts Retrievable…………………….. 80,000 30 Dividends……………$50,000 Cash…………….. 500,000 ADDITIONAL REQUIREMENT FOR 3.2 Posting of transaction from General Journal to T-Accounts Prepare trial…arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
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