Concept explainers
(a)
Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to create accounting principles for the implementation of financial information reporting in the Country U.
International Financial Reporting Standards (IFRS): IFRS are a set of international accounting standards which are framed, approved, and published by International Accounting Standards Board (IASB) for the preparation and disclosure of international financial reports.
To explain: The differences in the presentation of
(b)
To compare: The financial statement terms used by Company L and MJ International
(c)
To discuss: The term ‘revaluation reserves’ reported in equity section by Company L
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FINANCIAL+MANG.-W/ACCESS PRACTICE SET
- EX.17-184.ALGO A company reports the following: Sales Average total assets (excluding long-term investments) Determine the asset turnover ratio. Round your answer to one decimal place. I $7,635,340 1,075,400arrow_forwardMirabel Corporation's financial statements for 2020 follow: Sales...... Cost of goods sold. Gross profit.... Operating expenses. Income before taxes. Income taxes.. Net income.. MIRABELCORPORATION Statement of Income For the Year Ended July 31, 2020 Cash. Receivables. Inventory...... MIRABEL CORPORATION Statement of Financial Position July 31, 2020 Property, plant and equipment (net). Total assets. Current liabilities. Non-current liabilities. Common shares. Retained earnings.. Total liabilities and shareholders' equity. Calculate the current ratio (use up to two decimal places) $1,575,000 (976,500) 598,500 (236,250) 362,250 (144,900) $217,350 49,000 143,900 167,800 682,800 $1,043,500 $ 131,000 450,000 250,000 212,500 $1,043,500arrow_forwardSelected current year company information follows: Net income. Net sales Total liabilities, beginning-year Total liabilities, end-of-year Total stockholders' equity, beginning-year Total stockholders' equity, end-of-year The total asset turnover is: (Do not round Intermediate calculations.) $ 16,753 720,855 91,932 111, 201 206,935 133,851arrow_forward
- Selected income statement and balance sheet data from Merck & Co. for Year 9 are reproduced below: MERCK & COMPANY, INC. Year 9 Selected Financial Data ($ millions) Merck & Co. Income Statement Data Sales revenue... Depreciation...... Interest expense. $7,120 230 10 Pretax income... 2,550 Income taxes.. 900 Net income. 1,650 Balance Sheet Data Current assets... $4,850 Fixed assets, net... 2,400 Total assets.. 7,250 Current liabilities... 3,290 Long-term debt... 100 Shareholders' equity... 3,860 Total liabilities & shareholders' equity.. Required: a. Calculate return on common equity for Year 9 using year-end amounts and assuming no preferred dividends. b. Disaggregate Merck's ROCE. Comment on Merck's use of leverage. (Assume all assets and current liabilities are operating and a 35% tax rate.). c. Disaggregate ROA and comment on that.arrow_forwardSelected data for the Rubio Company follow:Current assets.............. $ 31,200 Current liabilities ............ $ 26,000Long-term assets ......... 185,000 Long-term liabilities........ 110,000Total revenues............. 199,000 Total expenses................. 160,000Based on these facts, what are Rubio’s current ratio and debt ratio?Current ratio Debt ratioa. 1.200 0.629b. 1.590 0.629c. 8.315 0.833d. 1.244 0.236arrow_forwardThe following information is from Lacy's Inc. $ millions Prior Fiscal Year Current Fiscal Year Net Year-End Assets Revenue Income $21,330 14,403 $18,955 $1,070 a. Compute the asset turnover ratio for the current fiscal year. b. Compute the return on assets ratio for the current fiscal year. Numerator a. Asset Turnover Ratio $ Check b. Return on Assets Ratio $ Numerator Denominator / $ Denominator / $ || Result Resultarrow_forward
- Grant Company purchased the net assets of Harding Company on January 1, 2015, and made the following entry to record the purchase:Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000Land. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 50,000Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000Note Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000Account to be determined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000Common Stock ($1 par). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000Paid-in Capital in Excess of Par . . . . . . . . . . . . . . .…arrow_forwardThe following financial statements were extracted from the books of Alpha Ltd. and Omega Ltd. for the yearended 31 March 2023:Statement of profit or loss for the year ended 31 March 2023:Alpha Ltd. Omega Ltd.Sh.“million” Sh.“million”Revenue 1,699.815 2,058.96Cost of sales (1,171.045) (1,397.135)Gross profit 528.77 661.825Less: Operating expenses (354.775) (469.89)Net profit 173.995 191.935Less: Finance expenses (22.31) (31.625)Profit before tax 151.685 160.31Tax (36.8) (40.02)Profit for the year 114.885 120.29Statement of financial position as at 31 March 2023:Alpha Ltd. Omega Ltd.Non-current assets Sh.“million” Sh.“million”Land and building 414.00 586.5Furniture and fittings 100.65 104.88514.05 691.38Current assets:Inventories 680.80 463.45Trade receivables 202.86 370.185Bank 97.29 105.34980.95 938.975Total assets 1,495 1,630.355Capital and liabilities:Capital:Ordinary share capital 368.00 287.50Retained earning 422.74 718.29790.74 1,005.79Non-current liabilities:Bank loan 218.50…arrow_forwardKincaid Company reported the following data (in millions) for the past two years:2019 2018$$$$$2801501304090$$$$$2501401103575Net revenues........................................Cost of goods sold...............................Gross profit..........................................Operating expenses..............................Operating income................................In a vertical analysis of 2019, the operating expenses percentage is closest toa. 225%.b. 69%.c. 14%.d. 32%.arrow_forward
- ABC Company's accounting records reported the followingaccount balances as of December 31, 2028:Inventory ................... $59,000Trademark ................... $16,000Interest revenue ............ $21,000Accounts receivable ......... $44,000Cost of goods sold .......... $30,000Utilities expense ........... $29,000Salaries payable ............ $14,000Accumulated depreciation .... $37,000Land ........................ ?Dividends ................... $ 9,000Notes payable ............... $48,000Common stock ................ ?Rental revenue .............. $35,000Supplies .................... $23,000Income tax expense .......... $18,000Retained earnings ........... $57,000 (at Jan. 1, 2028)Sales revenue ............... $99,000Equipment ................... $74,000Copyright ................... $38,000Accounts payable ............ $41,000Salaries expense ............ $27,000Cash ........................ $19,000Additional information:The total equity at December 31, 2028 was $196,000.Calculate…arrow_forwardThe condensed income statements through income from operations for Amazon.com, Inc., Best Buy, Inc., and Walmart Stores, Inc. for a recent fiscal year follow (in million): ............................................................. Amazon Best Buy Walmart Sales………………………………............…..…. $88,988 ........ $40,339 ...... $485,651 Cost of Goods Sold…………….....…….. 62,752 ......... 31,292 ........ 365,086 Gross Profit ……………………….…...... $26,236 ......... $ 9.047 .... $120,565 Selling, General & Administrative Expenses…... 26,058 ...... 7,592 ....93,418 Other Operating Expenses………..........……….. 0 ....... 5 ......... 0 Income From Operations……………...........…… $ 178 ........ $ 1,450 ........ $ 27,147 Required: Prepare comparative common-sized income statements for each company. (Round percentages to one decimal place.) Use the common-sized analysis to compare and interpret the financial performance of the…arrow_forwardAcrimony Ltd. has the following balances in its general ledger on 31 December 20X8 (in thousands of Canadian dollars): Debit Retained earnings, 31 December 20X7 Sales revenue Interest expense Cost of sales Accumulated other comprehensive income, 31 December 20X7 Dividends paid Foreign currency gains and losses on 20x8 transactions. Income tax expense Selling and administrative expense Amortization on furniture and fixtures for 20x8 Write-off of obsolete inventory Impairment of tangible capital assets Additional contributed capital Loss on redemption of long-term debt Unrealized foreign currency translation loss on self-sustaining U.S. subsidiary for 20x8, net of $184 income tax ACRIMONY LIMITED Statement of Comprehensive Income Year ended 31 December 20X8 (thousands of Canadian dollars) Contribution margin on sales Operating expenses: $ 900 9,200 3,200 1,720 4,600 1,650 650 1,090 Required: Prepare a statement of income and comprehensive income. (Enter answers in thousands, not in whole…arrow_forward
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