indly refer to the attached picture. I

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kindly refer to the attached picture. I need this ASAP. Thank you.

The comparative statement of financial position and statement
of comprehensive income of Entity A on December 31, 20x1 are
shown below:
Entity A
Entity A
Statement of Financial Position
Statement of Comprehensive Income
As of December 31, 20x1
For the year ended December 31, 20x1
ASSETS
20x1
20x0
Sales
1,000,000
Cash and cash equivalents
440,000
200,000
Cost of sales
(600,000)
Accounts receivable
130,000
120,000
GROSS PROFIT
400,000
Inventory
120,000
480,000
Rent income
150,000
Prepaid assets
40,000
160,000
Depreciation expense
(240,000)
Total current assets
730,000
960,000
Insurance expense
(120,000)
Bad debts expense
(30,000)
Property, plant & equipment
760,000
440,000
Loss on sale of equipment
(40,000)
Total noncurrent assets
760,000
440,000
PROFIT FOR THE YEAR
120,000
Other comprehensive income
TOTAL ASSETS
1,490,000 1,400,000
COMPREHENSIVE INCOME FOR THE YR.
120,000
LIABILITIES
Trade and other payables
620,000
560,000
Requirements: Compute for the following financial ratios for the
year 20x1: (round-off answers to two decimal places)
а.
Current ratio
EQUITY
b. Quick (Acid-test) ratio
Owner's capital
870,000
840,000
c. Working capital
d. Inventory turnover
TOTAL LIABILITIES & EQUITY
1,490,000 1,400,000
Days of inventory (use 365 days)
Accounts receivable turnover (assume all sales are on
е.
f.
credit)
g. Days of receivable (use 365 days)
h. Debt ratio
i.
Equity ratio
Debt-to-equity ratio
k. Gross profit ratio
1.
j.
Net profit ratio
m. Return on assets
n.
Return on equity
Transcribed Image Text:The comparative statement of financial position and statement of comprehensive income of Entity A on December 31, 20x1 are shown below: Entity A Entity A Statement of Financial Position Statement of Comprehensive Income As of December 31, 20x1 For the year ended December 31, 20x1 ASSETS 20x1 20x0 Sales 1,000,000 Cash and cash equivalents 440,000 200,000 Cost of sales (600,000) Accounts receivable 130,000 120,000 GROSS PROFIT 400,000 Inventory 120,000 480,000 Rent income 150,000 Prepaid assets 40,000 160,000 Depreciation expense (240,000) Total current assets 730,000 960,000 Insurance expense (120,000) Bad debts expense (30,000) Property, plant & equipment 760,000 440,000 Loss on sale of equipment (40,000) Total noncurrent assets 760,000 440,000 PROFIT FOR THE YEAR 120,000 Other comprehensive income TOTAL ASSETS 1,490,000 1,400,000 COMPREHENSIVE INCOME FOR THE YR. 120,000 LIABILITIES Trade and other payables 620,000 560,000 Requirements: Compute for the following financial ratios for the year 20x1: (round-off answers to two decimal places) а. Current ratio EQUITY b. Quick (Acid-test) ratio Owner's capital 870,000 840,000 c. Working capital d. Inventory turnover TOTAL LIABILITIES & EQUITY 1,490,000 1,400,000 Days of inventory (use 365 days) Accounts receivable turnover (assume all sales are on е. f. credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio Debt-to-equity ratio k. Gross profit ratio 1. j. Net profit ratio m. Return on assets n. Return on equity
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