Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Chapter 20, Problem 1JC
a.
To determine
The percentage change in assets and liabilities and the impact of the decision on EPS, pre-tax income, assets and liabilities when most conservative choice is considered.
b.
To determine
The percentage change in assets and liabilities and the impact of the decision on EPS, pre-tax income, assets and liabilities when least conservative choice is considered.
c.
To determine
The impact on the current ratios by both the conservative decision.
d.
To determine
To explain: Whether the management of LTC will care very much about the choices related to the adjustments.
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The following balance sheet is for X Company:
Balance Sheet
January 1, 2021
Assets
Equities
Cash
$95,217
Accounts Payable
$213,873
Accounts Receivable
11,259
Wages Payable
1,458
151,704
34,271
Inventory
Prepaid Rent
Notes Payable
5,574
Paid-In Capital
288,638
Equipment
337,420
Retained Earnings
62,934
Total Assets
$601,174
Total Equities
$601,174
The following summary transactions occurred during 2021:
• paid $80,810 to suppliers for merchandise previously purchased on account
• paid $22,120 for advertising
• sold merchandise for $442,246 on account and $271,054 for cash; the merchandise cost $413,714
agreed to a five-year rental lease for $10,000 and paid $2,000 in advance
• received $209,880 from customers for merchandise previously sold on account
Note: For the questions below, ignore adjusting entries on December 31, 2021.
6. What were total equities on December 31, 2021?
OA: $681,906||
B: $797,830|
C: $933,461
D: $1,092,149 OE: $1,277,815 OF: $1,495,043
Ch: Analyzing Financial Statements
The current year financial statement for sand and Juffair companies are presented below.
Balance sheet at 31 Dec 2019
Item
Cash
Account receivable (net)
Inventory
Property & equipment (net)
Other assets
Total assets
Current liabilities
Long-term debt (interest rate: 10%)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
Total liabilities and stockholders' equity
Income statement at 31 Dec 2019
item
Sales revenue (1/3 on credit)
(-) Cost of goods sold
(-) Operating expenses
Net income
Other data
item
Per share stock price at end of current year
Average income tax rate
Dividends declared and paid in current year
Sand
45000
45000
95000
160000
90000
435000
95000
75000
155000
40000
70000
435000
Sand
440000
230000
159000
51000
Sand
23
30%
34000
Juffair
22000
35000
45000
415000
320000
837000
65000
65000
522000
110000
75000
837000
Juffair
800000
399000
315000
86000
Juffair
25
30%
153000
Both companies are in the fish catching and…
The following balance sheet is for X Company:
Balance Sheet
January 1, 2021
Assets
Equities
Cash
$96,928
Accounts Payable
$205,898
Accounts Receivable
11,528
Wages Payable
1,138
Inventory
151,823
Notes Payable
33,991
Prepaid Rent
6,392
Paid-In Capital
313,317
Retained Earnings
Total Equities
Equipment
348,579
60,906
Total Assets
$615,250
$615,250
The following summary transactions occurred during 2021:
• borrowed $4,183 from the bank
• purchased $268,201 of merchandise on account and $132,099 for cash
• sold merchandise for $448,384 on account and $252,216 for cash; the merchandise cost $399,342
• paid $5,921 for land and equipment
• received $8,583 in cash contributions from new owners
Note: For the questions below, ignore adjusting entries on December 31, 2021.
6. What was the cash balance on December 31, 2021?
O A: $73,440O B: $106,488 Oc: $154,407 OD: $223,890 OE: $324,640
F: $470,729
Submit Answer
Tries 0/99
7. What was total owners' equity on December 31, 2021?
O A: $386,717 O B:…
Chapter 20 Solutions
Intermediate Accounting
Ch. 20 - Prob. 20.1QCh. 20 - Prob. 20.2QCh. 20 - If-Converted Method. Does the if-converted...Ch. 20 - Diluted EPS. If all potentially dilutive...Ch. 20 - Diluted EPS. Can diluted earnings per share on...Ch. 20 - Diluted EPS, Convertible Debt, and Preferred...Ch. 20 - Prob. 20.7QCh. 20 - Prob. 20.8QCh. 20 - Prob. 20.9QCh. 20 - EPS Disclosures. is an entity required to present...
Ch. 20 - Prob. 20.11QCh. 20 - Hutchins Company had 200,000 shares of common...Ch. 20 - Prob. 20.2MCCh. 20 - Prob. 20.3MCCh. 20 - Prob. 20.4MCCh. 20 - Refer to the information about Hutchins Company in...Ch. 20 - Prob. 20.6MCCh. 20 - Prob. 20.1BECh. 20 - Prob. 20.2BECh. 20 - Computing Income for Basic EPS. Russo Watches, Ltd...Ch. 20 - Prob. 20.4BECh. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Prob. 20.7BECh. 20 - Prob. 20.8BECh. 20 - Prob. 20.9BECh. 20 - Prob. 20.10BECh. 20 - Prob. 20.11BECh. 20 - Computing Basic and Diluted EPS, Options. Nicks...Ch. 20 - Computing Diluted EPS, Convertible Debt. Axelon...Ch. 20 - Computing Basic and Diluted EPS, Preferred Stock....Ch. 20 - Computing Weighted-Average Number of Common Shares...Ch. 20 - Prob. 20.3ECh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.5ECh. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Options,...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.12ECh. 20 - Prob. 20.1PCh. 20 - Prob. 20.2PCh. 20 - Computing Basic and Diluted EPS. Convertible...Ch. 20 - Prob. 20.4PCh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.7PCh. 20 - Prob. 20.8PCh. 20 - Prob. 1JCCh. 20 - Prob. 1FSCCh. 20 - Prob. 1SSCCh. 20 - Basis for Conclusions Case 1: Antidilutive...Ch. 20 - Basis for Conclusions Case 2: Treasury Stock...
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