Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Question
Chapter 12, Problem 1CP
1.
To determine
Prepare vertical analysis of the income statement using a multi-step income statement.
2.
To determine
Compute
3.
To determine
Compute quick ratio of Incorporation FED as on 31st May 2019.
4.
To determine
State whether the current ratio and quick ratio are favorable, and do you believe this is a temporary situation or a long-term situation.
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Effect of transactions on cash flows
The financial year for Gamma Limited ends on 30 June 2019.
Management has asked you what effect each of the following June transactions will have on net profit before tax, cash flow from operations, cash flow from investing and cash flow from financing for the year ended 30 June 2019:
1. Sent invoices for $40 000 to customers during June for work carried out in June; $19 000 of this had been collected by year-end.
2. Borrowed $300 000 from the bank on 10 June, with principal and interest repayable in six months. Accrued interest at 30 June is $2500.
3. Paid salaries for the month of $80 000, with $5000 in wages owing at year-end.
4. Received $30 000 deposit on a job that will be carried out in July 2019.
5. Paid accounts payable of $35 000 which was outstanding at 31 May 2019.
6. Sold old equipment for $20 000. The equipment originally cost $300 000 with accumulated depreciation at the time of sale of $250 000.
7. Purchased new equipment on 20 June…
Calculator
Cash paid to purchase long-term investments would be reported in the statement of cash flows in
a. the cash flows from operating activities section.
b. the cash flows from financing activities section.
C. the cash flows from investing activities section.
d. a separate schedule.
4:09 PM
12/20/2019
The following is the balance sheet and income statement for Metro Eagle Outfitters, in condensed form, plus some information from the cash flow statement.
Balance Sheet
2022
2021
2020
Cash and short-term investments
$ 644,992
$ 759,044
$ 748,693
Accounts receivable
47,721
41,710
39,521
Inventory
346,452
395,514
315,208
Other current assets
116,635
119,220
98,988
Total current assets
1,155,800
1,315,488
1,202,410
Long-lived assets
575,832
626,482
572,802
Total assets
$ 1,731,632
$ 1,941,970
$ 1,775,212
Current liabilities
$ 467,902
$ 447,401
$ 401,837
Total liabilities
509,045
521,986
421,341
Shareholders’ equity
1,222,587
1,419,984
1,353,871
Total liabilities and equity
$ 1,731,632
$ 1,941,970
$ 1,775,212
Income Statement
Sales
$ 3,478,602
$ 3,121,465
$ 2,948,094
Cost of sales
2,099,480
1,989,471
1,777,143
Gross margin
$ 1,379,122
$ 1,131,994
$ 1,170,951
Operating expenses
975,684
855,385
852,176
Earnings before interest and taxes
$…
Chapter 12 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 12 - Prob. 1DQCh. 12 - Which amount is the base amount for vertical...Ch. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - How would you expect a recession to affect asset...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1SCCh. 12 - Prob. 2SCCh. 12 - Prob. 3SCCh. 12 - Prob. 4SCCh. 12 - Prob. 5SCCh. 12 - Prob. 6SCCh. 12 - Prob. 7SCCh. 12 - Prob. 8SCCh. 12 - Prob. 9SCCh. 12 - Prob. 10SCCh. 12 - Prob. 11SCCh. 12 - Prob. 12SCCh. 12 - Prob. 1SECh. 12 - Prob. 2SECh. 12 - Prob. 3SECh. 12 - Prob. 4SECh. 12 - Prob. 5SECh. 12 - Prob. 6SECh. 12 - Prob. 7SECh. 12 - Prob. 8SECh. 12 - Prob. 9SECh. 12 - Prob. 10SECh. 12 - Horizontal analysis(Learning Objective 2)15-20 min...Ch. 12 - Prob. 12AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 14AECh. 12 - Prob. 15AECh. 12 - Prob. 16AECh. 12 - Prob. 17AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 26BECh. 12 - Prob. 27BECh. 12 - Prob. 28BECh. 12 - Prob. 29BECh. 12 - Prob. 30BECh. 12 - Trend percentages and return on assets (Learning...Ch. 12 - Common-size financial statements and profitability...Ch. 12 - Current ratio, debt ratio, EPS (Learning Objective...Ch. 12 - Calculating various ratios for analysis (Learning...Ch. 12 - Prob. 35APCh. 12 - Prob. 36APCh. 12 - Trend percentages and return on assets (Learning...Ch. 12 - Common-size financial statements and profitability...Ch. 12 - Prob. 39BPCh. 12 - Calculating various ratios for analysis(Learning...Ch. 12 - Calculating various ratios for analysis (Learning...Ch. 12 - Prob. 42BPCh. 12 - Prob. 1CECh. 12 - Prob. 1CPCh. 12 - Prob. 1EIACh. 12 - Prob. 2EIACh. 12 - Prob. 1FACh. 12 - Industry Analysis Purpose: To help you understand...Ch. 12 - Prob. 1SBACh. 12 - Prob. 1WC
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