FINANCIAL ACCOUNTING>IC<
15th Edition
ISBN: 9781119344988
Author: Kimmel
Publisher: WILEY C
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Chapter 2, Problem 2.5BE
(a)
To determine
Formula of current ratio:
To determine: (a) Current ratio.
(b)
To determine
Debt to assets ratio: This financial ratio evaluates the ability of a company to pay off long-term debt obligations owed to creditors. This ratio assesses the solvency of a company.
Formula of debt to assets ratio:
To determine: (b) Debt to assets ratio
(c)
To determine
Formula of free cash flow:
To determine: (c) Free cash flow.
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Given the following information about Sandhill Sporting Goods, Inc., construct a balance sheet for June 30, 2017. On that date the firm had cash and marketable securities of $25,135, accounts receivables of $43,758, inventory of $168,500, net fixed assets of $320,700, and other assets of $13,125. It had accounts payables of $67,855, notes payables of $36,454, long-term debt of $224,500, and common stock of $150,000. How much retained earnings did the firm have?
Accountants for Johnson, Inc. have assembled the following data for the year ended December 31, 2018:
2018 2017
Current Assets
Cash $124,700 $26,000
Accounts Receivable 64,500 69,400
Merchandise Inventory 82,000 79,000
Current Liabilities
Accounts Payable 57,700 55,500
Income Tax Payable 14,300 17,100
Transaction Data for 2018:
Issuance of common stock for cash $43,000 Payment of notes payable $44,100
Depreciation expense 26,000 Payment of cash dividends 51,000
Purchase of equipment with cash 69,000 Issuance of notes payable to borrow cash 66,000
Acquisition of land by issuing long-term notes payable 115,000 Gain on sale of building 6,500
Book value of building sold 56,000 Net income 70,500
Prepare Johnson's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activities.
Accountants for Putterham, Inc. have assembled the following data for the year ended December 31, 2018:
2018
2017
Current Assets:
Cash
$ 99,400
$ 25,000
Accounts Receivable
64,100
69,700
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83,000
75,000
Current Liabilities:
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55,200
Income Tax Payable
14,800
16,800
Transaction Data for 2018:
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$ 38,000
Payment of notes payable
$ 46,100
Depreciation expense
24,000
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119,000
Gain on sale of building
4,500
Book value of building sold
54,000
Net income
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Prepare Putterham’s statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and…
Chapter 2 Solutions
FINANCIAL ACCOUNTING>IC<
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Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - (a) What is the primary objective of financial...Ch. 2 - Merle Hawkins, the president of Pathway Company,...Ch. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - Prob. 17QCh. 2 - Prob. 18QCh. 2 - What is the economic entity assumption? Give an...Ch. 2 - Prob. 20QCh. 2 - The following are the major balance sheet...Ch. 2 - Prob. 2.2BECh. 2 - Prob. 2.3BECh. 2 - Prob. 2.4BECh. 2 - Prob. 2.5BECh. 2 - Prob. 2.6BECh. 2 - Prob. 2.7BECh. 2 - Prob. 2.8BECh. 2 - Here are some qualitative characteristics of...Ch. 2 - Prob. 2.10BECh. 2 - Prob. 2.1ADIECh. 2 - Prob. 2.1BDIECh. 2 - Prob. 2.2DIECh. 2 - The following characteristics, assumptions,...Ch. 2 - Prob. 2.1ECh. 2 - The major balance sheet classifications are listed...Ch. 2 - Prob. 2.3ECh. 2 - Prob. 2.4ECh. 2 - Prob. 2.5ECh. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Prob. 2.8ECh. 2 - Nordstrom, Inc. operates department stores in...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Prob. 2.5APCh. 2 - Prob. 2.6APCh. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.1EYCTCh. 2 - Prob. 2.2EYCTCh. 2 - Prob. 2.3EYCTCh. 2 - Prob. 2.4EYCTCh. 2 - Prob. 2.7EYCTCh. 2 - Prob. 2.8EYCTCh. 2 - Prob. 2.9EYCTCh. 2 - ETHICS CASE At one time, Boeing closed a giant...Ch. 2 - In what ways does the format of a statement of...Ch. 2 - Prob. 2.2IFRSCh. 2 - Prob. 2.3IFRSCh. 2 - Prob. 2.4IFRSCh. 2 - Prob. 2.5IFRS
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