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Accounting

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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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Aggressive Corporation approaches Matt Taylor, a loan officer for Oklahoma State Bank, seeking to increase the company’s borrowings with the bank from $100,000 to $150,000. Matt has an uneasy feeling as he examines the loan application from Aggressive Corporation, which just completed its first year of operations. The application included the following financial statements. The income statement submitted with the application shows net income of $30,000 in the first year of operations. Referring to the balance sheet, this net income represents a more-thanacceptable 15% rate of return on assets of $200,000. Matt’s concern stems from his recollection that the $100,000 note payable reported on the balance sheet is a three-year loan from his bank, approved earlier this year. He recalls another promising new company that, just recently, defaulted on its loan due to its inability to generate sufficient cash flows to meet its loan obligations. Seeing Matt’s hesitation, Larry Bling, the CEO…
Matching: For each of the following situations, select the best answer concerning the classification of the liability. a. Electric bill owed to a local utility b. Fees charged by bankruptcy trustee c. Inventory valued at $61,895 collaterizing a note payable to a bank in the amount of $56,982 d. Land and building valued at $427,000 mortgaged by a bank loan in the amount of $517,000 e. Salaries payable to employees in the following amounts: $1250, $1876, $4500 Classification Options: Unsecured without Priority Partially Secured Unsecured with Priority Fully Secured
51. Use the following information to question 51 to 56. Mr. Epson Brother started a printing supplies merchandising business on February 1, 2021. He invested P500,000 cash to start the business. Mr. Epson paid the following fees for Business Permit: Mayor's Permit P36,345 BIR Registration Fee P1,000 Cedula P500 DTI Certificate P2,500 All permits and licenses to operate the business is approved and released February 2, 2021. On February 3, 2021 Mr. Epson received a sales invoice from Mr. Divi, a supplier, for the initial inventory of the business. The total amount of the sales invoice is P250,500. Mr. Divi gave Mr. Epson 30-days term for the payment of the inventory. On February 4, 2021 Mr. Epson started the operation of the business. The records of cash sales as follows: February 8 - P50,232 February 9 - P12,523 February 10 - P25,423 February 11 - P14,256 February 12- P8,756 February 13- P2,235 The records of sales on account as follows: February 8 - P14,256 February 9 - P2,856…
Conduct an in-depth analysis of the Bank of St. Vincent and the Grenadines Ltd financial reporting practices and asset management strategies. Here is the report: BOSVG-Audited-Consolidated-Financial-Statements-FYE-December-31-2022.pdf (ecseonline.com) Using the report evaluate the following: Financial Reporting Analysis: a) Evaluate the company’s latest annual financial statements (balance sheet, income statement, and cash flow statement) and comment on the company's financial performance and position. In your response, use the requirements of IAS 1 as a guide. b) Identify and discuss key accounting principles and standards applied in the company’s financial reporting process indicating their reasons for choosing these and how they were applied. Comment briefly on the appropriateness of the choices made given the company’s industry, location and type (e.g. MNC, regional conglomerate, etc.) c) Critically analyze any significant accounting policies and estimates disclosed in the notes…
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You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company's financial statements, including comparing Lydex's performance to its major competitors. The company's financial statements for the last two years are as follows: Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Lydex Company Comparative Balance Sheet This Year Last Year $ 940,000 0 Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company 2,620,000 3,580,000 250,000 7,390,000 9,480,000 $ 16,870,000 $ 3,990,000 3,660,000 7,650,000 7,500,000 1,720,000 9,220,000 $ 16,870,000 $ 1,180,000 300,000 1,720,000…
On 1/1, the establishment began its commercial activity with a capital of 200, 000 Saudi riyals, which was deposited in the bank. On 1/3, the company rented a building for an amount of 30,000 Saudi riyals, which was paid by check. On 1/6, the facility paid electricity expenses in the amount of 1,200 in cash On2/ 2, maintenance services were provided to the Rabwa facility for an amount of 160,000, which was received by check . It is required to make daily entries and then post them to the ledger
The following events pertain to Outdoor Entertainment Incorporated which specializes in hosting outdoor music festivals across the nation: Borrowed $116,000 cash from a local bank to assist in funding the next outdoor festival. Paid $33,000 cash for supplies related to the festival. Received $158,000 cash for ticket sales related to the festival. Paid $53,200 in cash for employee salaries. Required: Record each of the following Outdoor Entertainment Incorporated events in T-accounts
If a company purchased cryptocurrencies valued at $53,500, explain how should the company report the cryptocurrencies in the financial statements? DISCUSS the answers to the above question. You need to explain your answers sufficiently.
After researching the different forms of business organization, Natalie Koebel decides to operate “Cookie Creations” as a corporation. She then starts the process of getting the business running. In November 2022, the following activities take place. Nov. 8 Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account. 8 She opens a bank account under the name “Cookie Creations” and transfers $500 from her personal account to the new account in exchange for common stock. 11 Natalie pays $65 to have advertising brochures and posters printed. She plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) 13 She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. 14 Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer…
Mr Gugu and Lethu are members of Gugulethu CC. The bookkeeper attempted to prepare the financial statements of the entity however, he lacked the technical knowhow of the task. The following information is extracted from the workings of the bookkeeper and relates to the close cooperation on 28 February 2021, the end of the financial year: R Vehicles 780 000 Land and buildings 1 210 000 Long-term loan 520 000 Inventory (1 March 2020) 52 000 Trade receivables control 150 000 Trade payables control 84 790 Purchases 761 000 Purchases returns 5 100 Settlement discount granted 2 800 Freight on sales 12 300 Interest on long-term loan 43 875 Sales returns 2 300 Insurance expense 48 000 Settlement discount received 850 Allowance for credit…
Which of the following scenarios is a financing activity? A.) An observation that, on average, customers return $570 worth of merchandise each month B.) $2,000 received from the bank to aid in the purchase of the building C .) $5,670 recorded as profit for June documented on the income statement D.) Purchase of the building next to the Paisley Place for $25,000 to be used for expansion