Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 2, Problem 2.3E
Classifying Accounts and Their Usual Balances
As described in a recent annual report, Verizon Communications provides wireless voice and data services across one of the most extensive wireless networks in the United States. Verizon now serves more than 100 million customers, making it the largest wireless service provider in the United States in terms of the total number of customers. The following are accounts from a recent
| (1) |
(6) Long-Term Investments |
| (2) |
(7) Plant. Property, and Equipment |
| (3) Accrued Expenses Payable | (8) Accounts Payable |
| (4) Prepaid Expenses | (9) Short-Term Investments |
| (5) Common Stock | (10) Long-Term Debt |
Required:
For each account, indicate (I) whether the account is usually classified as a current asset (CA). noncurrent asset (NCA), current liability (CL), noncurrent liability- (NCL), or stockholders’ equity (SE) item and (2) whether the account usually has a debit or credit balance.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Green Technologies is a leading global end-to-end technology provider, with a portfolio of hardware, software and service solutions. In
a recent annual report, the balance sheet included the following information ($ in millions):
Current assets:
Receivables, less allowance of $289 in 2020 and
$280 in 2019
Req 1
In addition, the income statement reported sales revenue of $105,232 million for the current year. All sales are made on a credit basis.
The statement of cash flows indicates that cash collected from customers during the current year was $104,868 million. There could
have been significant recoveries of accounts receivable previously written off.
Required:
1. Compute the following ($ in millions):
Req 2A
2020
a. The amount of bad debts written off by Green during 2020 (Hint. Treat it as a plug in the gross accounts receivable
account).
b. The amount of bad debt expense that Green included in its income statement for 2020 (Hint. Treat it as a plug in the
allowance for…
In 2021, Bank Muscat reported the following amounts
in its Balance sheet and Income Statement.
Assets
1032600 OMR
Liabilities
805500 OMR
Interest Revenue 602300 OMR
Interest Expense 404000 OMR
Earning assets are 75% of Total Assets.
Interest Bearing Liabilities are 80% of Total Liabilities.
What is the Spread of Bank Muscat?
Select one:
Oa. 2.54 %
Ob. 15.08 %
Oc. 8.17 %
Od. 27.62 %
What does the company report for the following accounts for the most current fiscal year:
Enter your answer in millions.
Total Assets: 70,581
Total Liabilities: 67,282
Long-Term debt: 35,822
Other long-term liabilities: 8,294
Operating Income: 18,278
Interest expense: 1,347
2. The company projects the following for the next fiscal year:
• Total assets will increase by 5%.• Total liabilities will increase by 6%.• Long-term debt and interest expense will increase by 7%.• Operating income will increase by $750 million.
a. Total assets: 74,100
b Total liabilities: 71,319
c. Long-term debt: 38,330
d. operating income: 19,028
e. Interest expense:
Provide the next year’s forecasted balances for the above accounts.
Round your answer to the nearest million.
1. Compute the forecasted debt to equity ratio for the next fiscal year. Round your answer to two decimal places.
2. Compute the forecasted long-term debt to equity ratio for the next fiscal year. Round your answer to two decimal…
Chapter 2 Solutions
Financial Accounting
Ch. 2 - Prob. 1QCh. 2 - Define the following: a. Asset b. Current asset c....Ch. 2 - Explain what the following accounting terms mean:...Ch. 2 - Why are accounting assumptions necessary?Ch. 2 - For accounting purposes, what is an account?...Ch. 2 - What is the fundamental accounting model?Ch. 2 - Prob. 7QCh. 2 - Explain what debit and credit mean.Ch. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - How is the current ratio computed and interpreted?Ch. 2 - Prob. 14QCh. 2 - Prob. 1MCQCh. 2 - Which of the following is not an asset? a....Ch. 2 - Total liabilities on a balance sheet at the end of...Ch. 2 - The dual effects concept can best be described as...Ch. 2 - The T-account is a tool commonly used for...Ch. 2 - Prob. 6MCQCh. 2 - The Cash T-account has a beginning balance of...Ch. 2 - Prob. 8MCQCh. 2 - At the end of a recent year, The Gap, Inc.,...Ch. 2 - Prob. 10MCQCh. 2 - Matching Definitions with Terms Match each...Ch. 2 - Matching Definitions with Terms Match each...Ch. 2 - Identifying Events as Accounting Transactions...Ch. 2 - Classifying Accounts on a Balance Sheet The...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Prob. 2.6MECh. 2 - Prob. 2.7MECh. 2 - Prob. 2.8MECh. 2 - Prob. 2.9MECh. 2 - Prob. 2.10MECh. 2 - Prob. 2.11MECh. 2 - Computing and Interpreting the Current Ratio...Ch. 2 - Identifying Transactions as Investing or Financing...Ch. 2 - Matching Definitions with Terms Match each...Ch. 2 - Identifying Account Titles The following are...Ch. 2 - Classifying Accounts and Their Usual Balances As...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Recording Investing and Financing Activities Refer...Ch. 2 - Prob. 2.7ECh. 2 - Recording Investing and Financing Activities...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Prob. 2.11ECh. 2 - Inferring Investing and Financing Transactions and...Ch. 2 - Recording Journal Entries Nathanson Corporation...Ch. 2 - Prob. 2.14ECh. 2 - Analyzing the Effects of Transactions Using...Ch. 2 - Prob. 2.16ECh. 2 - Prob. 2.17ECh. 2 - Prob. 2.18ECh. 2 - Inferring Typical Investing and Financing...Ch. 2 - Prob. 2.20ECh. 2 - Identifying the Investing and Financing Activities...Ch. 2 - Prob. 2.22ECh. 2 - Identifying Accounts on a Classified Balance Sheet...Ch. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.5PCh. 2 - Prob. 2.6PCh. 2 - Prob. 2.1APCh. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Recording Transactions in T-Accounts, Preparing...Ch. 2 - Prob. 2.4APCh. 2 - Accounting for the Establishment of a New Business...Ch. 2 - Prob. 2.1CPCh. 2 - Prob. 2.2CPCh. 2 - Prob. 2.3CPCh. 2 - Prob. 2.4CPCh. 2 - Prob. 2.5CPCh. 2 - Prob. 2.6CPCh. 2 - Prob. 2.7CPCh. 2 - Prob. 2.8CP
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
- You are considering two possible companies for investment purposes. The following data is available for each company. Company A Net credit sales, Dec. 31, 2019 $540,000 Net Accounts receivable, Dec 31, 2018 $120,000 Net accounts receivable, Dec 31, 2019 $180,000 Number of days sales in receivables ratio, 2018 103 days Net Income, Dec. 31, 2018 $250,000 Company B Net credit sales, Dec. 31, 2019 $620,000 Net Accounts receivable, Dec 31, 2018 $145,000 Net accounts receivable, Dec 31, 2019 $175,000 Number of days sales in receivables ratio, 2018 110 days Net Income, Dec. 31, 2018 $350,000 Additional Information: Company A: Bad debt estimation percentage using the income statement method is 6%, and the balance sheet…arrow_forwardBelow is the Statement of Financial Position for Rafah Islamic Bank: RAFAH ISLAMIC BANK STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER 2020 Assets RM Non current Asset 5,670,000 Long Term Investment 654,000,000 Financing (Net) 1,244,000,000 Corporate Bond Investment 919,094,000 Commercial Securities Investment 389,543,000 Deposits in other financial institutions 487,043,700 Other current assets…arrow_forwardRatio AnalysisPresented below are summary financial data from Pompeo’s annual report: Amounts in millions Balance Sheet Cash and Cash Equivalents $1,865 Marketable Securities 19,100 Accounts Receivable (net) 9,367 Total Current Assets 39,088 Total Assets 123,078 Current Liabilities 39,255 Long-Term Debt 7,279 Shareholders’ Equity 68,278 Income Statement Interest Expense 375 Net Income Before Taxes 14,007 Calculate the following ratios:(Round to 2 decimal points) a. Times-interest-earned ratio Answer b. Quick ratio Answer c. Current ratio Answer PreviousSave AnswersNextarrow_forward
- Consider the following financial data for Nguyen Industries: Statement of Financial Position as of December 31, 2018 Cash $ 232,500 Accounts payable $ 86,500 Accts. receivable 357,500 Short-term bank note 254,000 Inventories 150,500 Accrued wages & taxes 80,000 Total current assets $ 740,500 Total current liabilities $ 420,500 Long-term debt 566,000 Net fixed assets 774,500 Common equity 528,500 Total assets $ 1,515,000 Total liab. & equity $ 1,515,000 Profit & Loss Statement for 2018 Industry Average Ratios Net sales $ 1,894,000 Current ratio 1.4× Cost of goods sold 1,382,500 Quick ratio 1.0× Gross profit $ 511,500 Days sales outstanding 63 days Operating expenses 373,000 Inventory turnover 9.5× EBIT $ 138,500 Total asset turnover 1.5× Interest expense 64,000 Net…arrow_forwardThe following select financial statement information from Vortex Computing. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Vortex Computing if industry average for accounts receivable turnover ratio is 4 times and days sales in receivables ratio is 85 days?arrow_forwardRatio Analysis Presented below are summary financial data from Pompeo’s annual report: Amounts in millions Balance sheet Cash and cash equivalents $2,712 Marketable securities 27,128 Accounts receivable (net) 14,051 Total current assets 58,632 Total assets 184,617 Current liabilities 66,017 Long-term debt 12,738 Shareholders’ equity 119,487 Income Statement Interest expense 539 Net income before taxes 24,512 Calculate the following ratios: (round to two decimal places) a. Times-interest-earned ratio b. Quick ratio c. Current ratioarrow_forward
- Ratio Analysis Presented below are summary financial data from Pompeo's annual report: Amounts in millions Balance sheet Cash and cash equivalents $6,328 Marketable securities 63,298 Accounts receivable (net) 32,785 Total current assets 136,808 Total assets 430,773 Current liabilities 113,172 Long-term debt 21,837 Shareholders' equity 204,834 Income Statement Interest expense 1,257 Net income before taxes 42,021 Calculate the following ratios: (round to two decimal places) a. Times-interest-earned ratio b. Quick ratioarrow_forwardThe following financial data (in thousands) were taken from recent financial statements of Staples, Inc.: Please see the attachment for details: 1. Determine the times interest earned ratio for Staples in Year 3, Year 2, and Year 1? Round your answers to one decimal place.2. Evaluate this ratio for Staples.arrow_forwardMotorola Credit Corporation's annual report (dollars in millions) 3311 Net revenue (sales) Net earnings 170 Total assets 2,245 Total liabilities 1,929 Total stockholders' equity 316 a. Find the total debt to total assets ratio. (Round your answer to the nearest hundredth percent.) Total debt to total assets b. Find the return on equity ratio. (Round your answer to the nearest hundredth percent.) Return on equity c. Find the asset turnover ratio. (Round your answer to the nearest cent.) Asset turnover d. Find the profit margin ratio on net sales. (Round your answer to the nearest hundredth percent.) Profit marginarrow_forward
- Presented below are summary financial data from Pompeo's annual report: Amounts in millions Balance sheet Cash and cash equivalents $5,876 Marketable securities 58,776 Accounts receivable (net) 30,443 Total current assets 127,036 Total assets |400,004 Current liabilities 113,172 Long-term debt 21,837 Shareholders' equity 204,834 Income Statement Interest expense 1,167 Net income before taxes 42,021 Calculate the following ratios: (round to two decimal places) a. Times-interest-earned ratio b. Quick ratio C. Current ratioarrow_forward. The financial statements for BSW National Bank (BSWNB) are shown below: Earning assets: $13,884 Interest-bearing liabilities (Spread) = $9,012 Calculate BSWNB’s asset utilization ratio. 2. Calculate BSWNB’s net interest marginarrow_forwardCalculate the quick assets (in $) and acid test ratio for the given company. Round ratios to the nearest hundredth. Company Current Assets Current Liabilities Cash Marketable Securities Accounts Receivable Quick Assets Acid Test Ratio a personal electronics retail store $14,640 $19,600 $2,890 0 $4,430arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
How To Analyze an Income Statement; Author: Daniel Pronk;https://www.youtube.com/watch?v=uVHGgSXtQmE;License: Standard Youtube License