Income Statement:
It is a financial statement which show the
Statement of
It is a financial statement which shows the amount of profit retained by the company for their future unforeseen events.
The balance sheet concludes the assets invested in by the company as well as reports the liabilities and equity taken up thus showing the economic or financial status of the company.
Closing entries:
These entries is made for those item whose balance need to be zero for next accounting period otherwise data of two accounting periods will get mix with each other and we only want to see the data of one accounting period in it.
Return on asset:
It tells us about how much company is earning from total amount of asset it has. It is determined by dividing net income from total average assets in percentage terms.
Debt ratio:
It shows how much of the company’s assets are bought using debt capital. Higher the debt ratio higher the financial risk, lower the debt ratio lower the financial risk. it comes after dividing debt capital by total assets.
Profit margin ratio:
It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.
It shows whether company will be able to pay their current liabilities out of their current asset or not. It comes after dividing current liabilities from current assets.
1.
To prepare: Income statement, statement of retained earnings and classified balance sheet.
2.
To prepare:
3.
a.
Return on assets ratio.
b.
Debt ratio.
c.
Profit margin ratio.
d.
Current ratio.
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FINANCIAL & MANAG ACCT (CH. 1 - 24 EBOOK
- Instructions Mar. Purchased merchandise on account from Kirkwood Co., $372,000, terms n/30. 1 31 Issued a 30-day, 4% note for $372,000 to Kirkwood Co., on account. Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. Jun. Borrowed $150,000 from Triple Creek Bank, issuing a 45-day, 8% note. 1 Jul. 1. Purchased tools by issuing a $276,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%. 16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6.5% note for $150,000. (Journalize both the debit and credit to the notes payable account.) Aug. 15 Paid Triple Creek Bank the amount due on the note of July 16. 30 Paid Poulin Co. the amount due on the note of July 1. Dec. Purchased equipment from Greenwood Co. for $540,000, paying $108,000 cash and issuing a series of ten 4% notes for $43,200 each, coming due at 30-day intervals. 22 Settled a product liability lawsuit with a customer for $309,500, payable…arrow_forwardTwo types of closing journal entries are posted to retained earnings at year-end. These are entries to: Multiple Choice transfer revenues and expenses to retained earnings. transfer assets and liabilities to retained earnings. transfer net income (or loss) and dividends declared to retained earnings. close permanent and temporary accounts. 50 TBUR Nextarrow_forwardB. ADJUSTING ENTRIES: More Review Show (MRS) prepares quarterly statements. The bookkeeper presented to you the records and you found out the following account balances before adjustments for the quarter ended March 31, 200B: 1. The notes receivable balance of P180,000 as of March 31, 200B consisted of a 60-day 12% note for P120,000 dated February 14, 200B and a 30-day 6% note for P60,000 dated March 16, 200B 2. The balance of the prepaid insurance account of P22,000 represents a one-year policy contracted last November 1, 200A for P10,000 and two year policy contracted last July 1, 200Å for P12,000 3. The balance of the prepaid rent account of P50,000 pertains to advance rent paid last December 1, 200A six months effective on the same date. 4. The rate per day of each of the four shop workers is P350. MRS pays the weekly salaries of its workers every Monday of the following week ( a week consist of five days from Monday to Friday). March 31, 200B falls on Thursday. 5. Mortgage notes…arrow_forward
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