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FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?

Preferred shares
Retained earnings
Operating activities
Net income:
Adjustments for:
Depreciation
Change in Current Assets,excluding Cash:
Accounts receivable and other receivables
Inventories
Cash outflow from operating activities
Investing activities
Prepaid and other assets
Accounts payable and accrued liabilities
Deferred revenue
Purchase of equipment
Cash outflow from investing activities
Financing activities
95,000
389,455
641,695
2,747,012
Repayment of long-term debt
Cash outflow from financing activities
Cash decrease:
Cash, beginning
Cash, end of the year
Select one or more:
O a.
O b.
Oc.
O d.
Oe.
157,2ND
95,000
58,125
110,365
2,845,460
2018
331,330
111,453
34,500
12,195
15,000
1,680
(18,095)
88,06
(95,375)
(95,375)
(413,363)
(413,363)
(20,675)
62,725
42,050
2017
443,618
118,552
(18,500)
(9,874)
(4,237)
(14,014)
(23,000)
492,545
f.
If the target debt ratio is 0.50, Arnett's solvency is very healthy
O g.
(275,286)
(275,286)
(345,650)
(345,650)
(128,391)
191,116
62,725
The amount of gross profit made per dollar of sales is increasing.
Arnett Ltd. purchased long-term assets in both 2017 and 2018
If industry standard for inventory turnover is 36 days, Arnett's
turnover is healthy in 2018
Arnett's cash flow from operating activities is very healthy
Cash flow from financing activities indicates the company may be in
financial trouble
Arnett is spending much less on occupancy costs to generate a dollar
in sales revenue in 2018, than it did in 2017
h. Arnett appears to be struggling to repay long-term debt
Transcribed Image Text:Preferred shares Retained earnings Operating activities Net income: Adjustments for: Depreciation Change in Current Assets,excluding Cash: Accounts receivable and other receivables Inventories Cash outflow from operating activities Investing activities Prepaid and other assets Accounts payable and accrued liabilities Deferred revenue Purchase of equipment Cash outflow from investing activities Financing activities 95,000 389,455 641,695 2,747,012 Repayment of long-term debt Cash outflow from financing activities Cash decrease: Cash, beginning Cash, end of the year Select one or more: O a. O b. Oc. O d. Oe. 157,2ND 95,000 58,125 110,365 2,845,460 2018 331,330 111,453 34,500 12,195 15,000 1,680 (18,095) 88,06 (95,375) (95,375) (413,363) (413,363) (20,675) 62,725 42,050 2017 443,618 118,552 (18,500) (9,874) (4,237) (14,014) (23,000) 492,545 f. If the target debt ratio is 0.50, Arnett's solvency is very healthy O g. (275,286) (275,286) (345,650) (345,650) (128,391) 191,116 62,725 The amount of gross profit made per dollar of sales is increasing. Arnett Ltd. purchased long-term assets in both 2017 and 2018 If industry standard for inventory turnover is 36 days, Arnett's turnover is healthy in 2018 Arnett's cash flow from operating activities is very healthy Cash flow from financing activities indicates the company may be in financial trouble Arnett is spending much less on occupancy costs to generate a dollar in sales revenue in 2018, than it did in 2017 h. Arnett appears to be struggling to repay long-term debt
Revenues
Cost of sales
Gross profit
Expenses
Salaries and wages
Occupancy costs
Interest expenses
Credit card and bank fees
Office and general
Professional fees
Consulting
Travel
Misc
Depreciation
Total expenses
Income Before Income Tax
Income tax
Net income
Assets
Current
Cash
Accounts receivable (net)
Inventory
Loans receivable
Prepaid and other assets
Property, plant and equipment (net)
Liabilities
Current
Accounts payable
Accrued liabilities
Deferred revenue
Current portion of loan
Current portion of mortgage
Long term loan
Long term mortgage
Total liabilities
Shareholder's equity
2018
5,415,226
2,813,600
2,601,626
1,333,640
182,400
8,150
81,228
145,610
84,500
86,500
201,300
13,515
111,453
2,248,296
353,330
22,000
331,330
2018
42,050
122,500
218,540
105,000
75,000
563,090
2,183,922
2,747,012
112,500
42,125
165,630
200,265
33,110
553,630
1,021,562
530,125
2,105,317
2017
5,526,205
2,916,555
2,609,650
1,215,125
182,115
9,712
82,893
157,125
82,725
112,150
225,000
8,525
118,552
2,193,922
415,728
27,890
443,618
2017
62,725
157,000
230,735
110,000
85,000
645,460
2,200,000
2,845,460
68,750
84,195
183,725
210,500
35.175
582,345
1,414,525
538.225
2,535,095
Transcribed Image Text:Revenues Cost of sales Gross profit Expenses Salaries and wages Occupancy costs Interest expenses Credit card and bank fees Office and general Professional fees Consulting Travel Misc Depreciation Total expenses Income Before Income Tax Income tax Net income Assets Current Cash Accounts receivable (net) Inventory Loans receivable Prepaid and other assets Property, plant and equipment (net) Liabilities Current Accounts payable Accrued liabilities Deferred revenue Current portion of loan Current portion of mortgage Long term loan Long term mortgage Total liabilities Shareholder's equity 2018 5,415,226 2,813,600 2,601,626 1,333,640 182,400 8,150 81,228 145,610 84,500 86,500 201,300 13,515 111,453 2,248,296 353,330 22,000 331,330 2018 42,050 122,500 218,540 105,000 75,000 563,090 2,183,922 2,747,012 112,500 42,125 165,630 200,265 33,110 553,630 1,021,562 530,125 2,105,317 2017 5,526,205 2,916,555 2,609,650 1,215,125 182,115 9,712 82,893 157,125 82,725 112,150 225,000 8,525 118,552 2,193,922 415,728 27,890 443,618 2017 62,725 157,000 230,735 110,000 85,000 645,460 2,200,000 2,845,460 68,750 84,195 183,725 210,500 35.175 582,345 1,414,525 538.225 2,535,095
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