Financial Accounting
9th Edition
ISBN: 9781259738692
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1.2CP
1.
To determine
Identify the net income reported by U Outfitters for the most recent year.
2.
To determine
Identify the revenue earned by U Outfitters in the most recent year.
3.
To determine
Identify the inventories available with U Outfitters, as of January 31, 2015.
4.
To determine
Identify the increase or decrease in cash and cash equivalents of U Outfitters, during the most recent year.
5.
To determine
Identify the auditor of U Outfitters.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Help me please
Required information
Use the following information for the Problems below. (Algo)
[The following information applies to the questions displayed below.]
Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current and
prior years follow.
LANSING COMPANY
Income Statement
For Current Year Ended December 31
Sales revenue
Expenses
Cost of goods sold
Depreciation expense
Salaries expense
Rent expense
Insurance expense
Interest expense
Utilities expense
Net income
$ 124,200
At December 31
Accounts receivable
Inventory
Accounts payable
Salaries payable
Utilities payable
Prepaid insurance
Prepaid rent
51,000
16,500
27,000
9,900
4,700
4,500
3,700
$ 6,900
LANSING COMPANY
Selected Balance Sheet Accounts
Current Year
$ 6,500
2,880
5,300
1,060
400
350
400
Prior Year
$ 7,600
1,990
6,400
790
250
460
270
You are the auditor for Sigma Pty Ltd.As part of your preliminary work, you have obtained the following information:
Current Year (unaudited)
Previous Year(audited)
Industry average
i) Current ratio (Working capital ratio)
1.91
2.35
2.91
ii) Receivables turnover
57 days
51 days
73 days
iii) Inventory turnover
72 days
65 days
96 days
iv) Gross profit margin
20%
18%
20%
v) Net profit margin
4%
4%
6%
In addition you have found that:
The financial controller resigned during the year and the company has yet to hire another financial controller. The accounts of the current year were prepared by the assistant accountant.
For situation mentioned above:
i). Which component of the Audit Risk Model (ARM) would be affected, and how?
ii). Discuss how your audit plan would be affected.
Note:Prepare your answers in a tabular format as follows:
Component of ARM
Effect on Audit Plan
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
Similar questions
- Use the following excerpts from Huckleberry Companys financial statements to determine cash paid to suppliers for inventory in 2018.arrow_forwardUse the following excerpts from Jasper Companys financial statements to determine cash paid to suppliers for inventory in 2018.arrow_forwardThe following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: During the year, Arnn had net sales of 2.45 million. The cost of goods sold was 1.3 million. Required: Note: Round all answers to two decimal places. 1. Compute the current ratio. 2. Compute the quick or acid-test ratio. 3. Compute the accounts receivable turnover ratio. 4. Compute the accounts receivable turnover in days. 5. Compute the inventory turnover ratio. 6. Compute the inventory turnover in days.arrow_forward
- 1))For the years ended December 31, 2018 of your analysis, assume all sales are on credit and then compute the following: · (a) collection period, · (b) accounts receivable turnover, · (c) inventory turnover, and · (d) days' sales in inventory. · (e) Based on your estimates, comment on the changes in the ratios from 2018 year by drawing conclusion regarding efficiency in managing inventory and in collecting receivables (Note: Comment not more than 10 lines). 2))Provide your recommendations for improving the financial condition of your company. (Note: Comment not more than 10 lines).arrow_forwardMay I ask for an explanation and solution to the question for a better understanding. Thank you! Selected information for Cain Corp. for the year ended December 31, 2021 are as follows: Average days' sales in inventories = 124; Average days' sales in accounting receivable = 48. The average number of days in the operating cycle for 2021 was: a. 172 b. 124 c. 86 d. 76arrow_forwardUse the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 617,500 Cost of goods sold 292,000 Gross profit 325,500 Operating expenses (excluding depreciation) $ 139,400 Depreciation expense 27,750 167,150 Other gains (losses) Loss on sale of equipment (12,125) Income before taxes 146,225 Income taxes expense 34,050 Net income $ 112,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year…arrow_forward
- Use the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 58,900 $ 79,500 Accounts receivable 74,830 56,625 Inventory 284,656 257,800 Prepaid expenses 1,270 2,015 Total current assets 419,656 395,940 Equipment 151,500 114,000 Accum.…arrow_forwardUse the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 58,900 $ 79,500 Accounts receivable 74,830 56,625 Inventory 284,656 257,800 Prepaid expenses 1,270 2,015 Total current assets 419,656 395,940 Equipment 151,500 114,000 Accum.…arrow_forward1- Calculate the financial ratios of Spinneys in 2022 and 2021. 2- Analyze the change between the years 2022 and 2021 in terms of financial ratios. Which financial ratios would you check to evaluate the performance of inventory management and cash management? Which year is better in terms of inventory management and cash management?arrow_forward
- qw.125. Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 637,500 Cost of goods sold 296,000 Gross profit 341,500 Operating expenses (excluding depreciation) $ 143,400 Depreciation expense 31,750 175,150 Other gains (losses) Loss on sale of equipment (16,125) Income before taxes 150,225 Income taxes expense 39,650 Net income $ 110,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 66,400 $ 84,500 Accounts receivable 82,380…arrow_forwardRequired: For each of the following accounts, what amount will Voltac report on its 2024 financial statements? a. Inventory b. Cost of goods sold c. Sales d. Accounts receivable e. Accounts payable f. Casharrow_forwardRequired information [The following information applies to the questions displayed below.] Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current and prior years follow. LANSING COMPANY Income Statement For Current Year Ended December 31 Sales revenue $ 121,200 Expenses Cost of goods sold Depreciation expense Salaries expense Rent expense Insurance expense Interest expense Utilities expense Net income LANSING COMPANY Selected Balance Sheet Accounts At December 31 Accounts receivable Inventory Accounts payable Salaries payable Utilities payable Prepaid insurance Prepaid rent 50,000 16,000 26,000 9,800 4,600 4,400 3,600 $ 6,800 Current Year $ 6,400 2,780 5,200 1,040 Cash flows from operating activities 380 340 380 Prior Year $ 7,400 LANSING COMPANY Cash Flows from Operating Activities-Direct Method For Current Year Ended December 31 1,940 6,200 780 240 Required: Prepare the operating activities section of the statement of cash flows…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning