Financial Accounting
9th Edition
ISBN: 9781259738692
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 1.10E
Inferring Values Using the Income Statement and Balance Sheet Equations
Review the chapter explanations of the income statement and the balance sheet equations. Apply these equations in each independent case to compute the two missing amounts for each case. Assume that it is the end of the first full year of operations for the company. (Hint: Organize the listed items as they are presented in the balance sheet and income statement equations and then compute the missing amounts.)
| Independent Cases | Total Revenues | Total Expenses | Net Income (Loss) | Total Assets | Total Liabilities | Stockholders’ Equity |
| A | $242,300 | $196,700 | $ | $253,500 | $ 75,000 | $ |
| B | 176,500 | 29,920 | 590,000 | 350,600 | ||
| C | 73,500 | 91,890 | 260,400 | 190,760 | ||
| D | 35,840 | 9,840 | 190,430 | 97,525 | ||
| E | 224,130 | 209,500 | 173,850 | 360,100 |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Use the Income Statement worksheet below to answer:  Which of the following items on the Income Statement connects to the same year’s Balance Sheet?
Â
Question 3 options:
Â
Liability Insurance
Â
Net Income
Â
EBT
Â
Gross Profit
Â
EBTDA
Select the best order for the following items in the income statement:
1. Income from continuing operations
2. Discontinued operations
3. Prior-period adjustments due to errors
4. Taxes on income from continuing operations
5. Dividends
6. Net Income
7. Revenues
8. Expenses
9. Income from continuing operations before income tax
7-5-6-1-4
7-8-9-4-1-2-6
8-9-7-6-5-1-3
8-9-7-5-2-1-3
Comparative information taken from the Friction Company's financial statements is shown below:
(a) Notes receivable
(b) Accounts receivable
(c) Retained earnings
(d) Sales
(e) Operating expenses
(f) Income taxes payable
a.
b.
Required:
Using horizontal analysis, show the percentage change and direction (increase or decrease) from Year 1 to Year 2 with Year 1 as the base year. If an item is impossible to compute, enter a "0" in the percentage box and select "Not possible to
compute" in the narrative box.
C.
d.
e.
f.
%
%
%
%
%
Year 2
%
Year 1
$25,500
$30,000
106,200
90,000
77,000
70,000
654,000 600,000
160,000 200,000
28,000 20,000
Chapter 1 Solutions
Financial Accounting
Ch. 1 - Define accounting.Ch. 1 - Briefly distinguish financial accounting from...Ch. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5QCh. 1 - Complete the following: Name of Statement...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the income statement,...Ch. 1 - Explain why the income statement and the statement...Ch. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Explain the equation for the income statement....Ch. 1 - Explain the equation for the balance sheet. Define...Ch. 1 - Explain the equation for the statement of cash...Ch. 1 - Explain the equation for retained earnings....Ch. 1 - The financial statements discussed in this chapter...Ch. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - (Supplement A) Briefly differentiate between a...Ch. 1 - Prob. 20QCh. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Which of the following regarding retained earnings...Ch. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Which of the following is true regarding the...Ch. 1 - Prob. 9MCQCh. 1 - Prob. 10MCQCh. 1 - Matching Elements with Financial Statements M1-1...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Prob. 1.3MECh. 1 - Prob. 1.1ECh. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Preparing a Balance Sheet Honda Motor Corporation...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Prob. 1.6ECh. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Prob. 1.8ECh. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing a Statement of Stockholders Equity...Ch. 1 - Focus on Cash Flows: Matching Cash Flow Statement...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Student's Business and Preparing an...Ch. 1 - Comparing Income with Cash Flow (Challenging)...Ch. 1 - Evaluating Data to Support a Loan Application...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Students Business and Preparing an...Ch. 1 - Prob. 1.3APCh. 1 - Prob. 1.1CONCh. 1 - Finding Financial Information LO1-1 Refer to the...Ch. 1 - Prob. 1.2CPCh. 1 - Comparing Companies within an Industry Refer to...Ch. 1 - Using Financial Reports: Identifying and...Ch. 1 - Prob. 1.5CPCh. 1 - Prob. 1.6CPCh. 1 - Prob. 1.7CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Net Income (or Loss) and Retained Earnings The following information is available from the records of Prestige Landscape Design Inc. at the end of the year: Required Use the previous information to answer the following questions. What is Prestiges net income for the year? What is Prestiges Retained Earnings balance at the end of the year? What is the total amount of Prestiges assets at the end of the year? What is the total amount of Prestiges liabilities at the end of the year? How much owners equity does Prestige have at the end of the year? What is Prestiges accounting equation at the end of the year?arrow_forwardThe following data (in millions) were taken from the financial statements of Costco Wholesale Corporation: a. For Costco, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for: 1. Revenue 2. Operating expenses 3. Operating income b. Comment on the results of your horizontal analysis in part (a). c. Based upon Exercise 2-23, compare and comment on the operating results of Target and Costco for the recent year.arrow_forwardPerform the Reperformance or Recalculation procedures to check the mathematical accuracy ofthe Income Statement. What issue did you find? What is the next step? Create a Correctedversion of the Income Statement. Income Statement    For the Year Ended For the Year Ended Revenue 3/31/2021 3/31/2022 Sales Revenue: Corporate Accounts  $             353,739.57  $             343,050.56 Sales Revenues: Storefront  $               80,649.00  $               91,411.50 Total Sales Revenue  $            434,388.57  $            434,462.06 Cost of Goods Sold: Ingredients  $               69,736.39  $               64,645.64 Cost of Goods Sold: Boxes and Cupcake Cups  $                 3,875.55  $                 3,755.55 Cost of Goods Sold: Beverages  $                 5,466.50  $                 5,681.50 Total COGS  $               76,078.44  $               74,082.69 Gross Profit  $            358,310.13  $            360,379.37 Interest Revenue  $…arrow_forward
- Please answer ASAPUsing the information provided in the picture, complete the calculation of accounting ratios andpercentages and comment briefly on the performance of the company for the twoyears.arrow_forwardWhich of the following is used to determine how the sales revenue of a company has changed from one year to the next? A horizontal analysis of the income statement B vertical analysis of the income statement C vertical analysis of the balance sheet D horizontal analysis of the balance sheetarrow_forwardQuestion-Specific Notes: Â you are given a role in a scenario, that of preparing an income statement for DL Enterprises for the month ending July 31, 20X8. The DL Enterprises info below may help you with the task of categorizing items. QUESTION: For each independent situation below calculate the missing valuesarrow_forward
- Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $15. At the start of January 2021, VGC's income statement accounts had zero balances and its balance sheet account balances were as follows: Cash Accounts Receivable Supplies Equipment Buildings Land Accounts Payable Deferred Revenue Notes Payable (due 2025) Common Stock Retained Earnings $ 1,500,000 150,000 14,700 874,500 422,000 1,200,000 108,000 73,500 60,000 2,500,000 1,419,700 In addition to the above accounts, VGC's chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense. The January transactions are shown below: a. Received $50,000 cash from customers on 1/1 for subscriptions that had already been earned and charged on account in 2020. b. Purchased 10 new computer servers for $33,500 on 1/2; paid $10,000 cash and signed a three-year note for the remainder owed. c. Paid $10,000 for an…arrow_forwardFind in Amount ($) and Percentage(%) for Year 2 over Year 1: Income Statement - (a) Operating Expense and interest expense (b) Earnings before income taxes (c) Income tax expensesarrow_forwardThe accountant wishes you to provide an analysis of the company’s annual operating expenses. Add an extra worksheet called “Expense analysis”, and add your 20Y3 data next to the given 20Y2 data. You must link this new Expense Analysis table/worksheet (relevant cells in column “E”) with the respective data from your 20Y3 income statement. Do not hard code the 20Y3 data. Use appropriate formula to calculate the total expenses in cell E10, E12 and percentages in column F and G.arrow_forward
- Alex is currently considering to invest his money in one of the companies betweenCompany A and Company B. The summarized final accounts of the companies for theirlast completed financial year are as follows: (refer to the images)  Required:a. Calculate the following ratios for Company A and Company B. State clearly theformulae used for each ratio:i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)v. Payables Payment Period (days)vi. Current Ratiovii. Quick Ratiob. Comment on each of the ratios calculated in part (a) above.arrow_forwardChoose from the following list of terms and phrases to best complete the statements below. a. Fiscal year c. Accrual basis accounting e. Cash basis accounting b. Timeliness d. Annual financial statements f. Time period assumption 1. presumes that an organization’s activities can be divided into specific time periods. 2. Financial reports covering a one-year period are known as . 3. A(n) consists of any 12 consecutive months. 4. records revenues when services are provided and records expenses when incurred. 5. The value of information is often linked to its .arrow_forwardepare an income statement for the year ended December 31, 2018, which includes amounts gross profit, income before income taxes, and net income. List expenses (other than cost of for goods sold and income tax expense) in order, from the largest to the smallest dollar balance. You may ignore earnings per share. pare a statement of retained earnings for the year ending December 31, 2018. Prepare thes a statement of financial position (balance sheet) as of December 31, 2018, following Include separate asset and liability categories for those items that are "current." Include and label amounts for total assets, total liabilities, total stockholders' equity, and total liabilities and stockholders' equity. Present deferred income taxes as a noncurrent liability. To the extent information is available that should be disclosed, include the parenthetical disclosure of that information.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License