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Note 1: Compute net income for 2020 Sales Cost of goods sold Gross profit Operating expenses Income before taxes Taxes expense Net income Required Calculate: Cash Ratio Quick Currant Ratio Current ratio $920,000 690.000 $230,000 180,000 $ 50,000 20.000 $.30,000 Note 2: Compute Stockholders' Equity Common stock ($7.5 par x 20,000 sh) $150,000 Additional paid-in capital ($10.5-$7.5) x 20,000 sh. Retained earnings, Dec 31, Year 4 Net income Retained earnings, Dec. 31, Year 5 Total 60.000 98,000 30.000 $210,000 128.000 $338.000

Note 1: Compute net income for 2020 Sales Cost of goods sold Gross profit Operating expenses Income before taxes Taxes expense Net income Required Calculate: Cash Ratio Quick Currant Ratio Current ratio $920,000 690.000 $230,000 180,000 $ 50,000 20.000 $.30,000 Note 2: Compute Stockholders' Equity Common stock ($7.5 par x 20,000 sh) $150,000 Additional paid-in capital ($10.5-$7.5) x 20,000 sh. Retained earnings, Dec 31, Year 4 Net income Retained earnings, Dec. 31, Year 5 Total 60.000 98,000 30.000 $210,000 128.000 $338.000

FINANCIAL ACCOUNTING
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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Current Assets Cash Accounts receivable Inventories Total current assets Non-current assets Total assets Supporting computations: Cost of goods sold Gross profit Operating expenses Income before taxes Taxes expense Net income Required Calculate: Note 1: Compute net income for 2020 Sales Cash Ratio Quick Currant Ratio Current ratio Working capital Total debts to total assets Assen Book value Market value $ 10,250 46,000 86.250 December 31, 2020 $143,000 280.500 $423.500 $920,000 690.000 $230,000 180.000 $ 50,000 20.000 $.30,000 Liabilities and Stockholders' Equity Current liabilities Non-current liabilities Total liabilities Stockholders' Equity Common stock Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and equity $23,000 62,000 Retained earnings, Dec. 31, Year 5 $150,000 60,000 128.000 Note 2: Compute Stockholders' Equity Common stock ($7.5 par x 20,000 sh.) Additional paid-in capital ($10.5-$7.5) x 20,000 sh. Retained earnings, Dec 31, Year 4 Net income Total $ 85,000 $338.000 $423.500 $150,000 60.000 $210,000 98,000 30,000 128.000 $338.000
Transcribed Image Text:Current Assets Cash Accounts receivable Inventories Total current assets Non-current assets Total assets Supporting computations: Cost of goods sold Gross profit Operating expenses Income before taxes Taxes expense Net income Required Calculate: Note 1: Compute net income for 2020 Sales Cash Ratio Quick Currant Ratio Current ratio Working capital Total debts to total assets Assen Book value Market value $ 10,250 46,000 86.250 December 31, 2020 $143,000 280.500 $423.500 $920,000 690.000 $230,000 180.000 $ 50,000 20.000 $.30,000 Liabilities and Stockholders' Equity Current liabilities Non-current liabilities Total liabilities Stockholders' Equity Common stock Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and equity $23,000 62,000 Retained earnings, Dec. 31, Year 5 $150,000 60,000 128.000 Note 2: Compute Stockholders' Equity Common stock ($7.5 par x 20,000 sh.) Additional paid-in capital ($10.5-$7.5) x 20,000 sh. Retained earnings, Dec 31, Year 4 Net income Total $ 85,000 $338.000 $423.500 $150,000 60.000 $210,000 98,000 30,000 128.000 $338.000
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