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 6, Problem 1JC
a.
To determine
The impact on assets and liabilities in terms of absolute dollar impact and percentage change if the company makes the most conservative choices.
Given information:
The balance sheet of the company is given, whose ending balance is $177,100. The CFO of the company must make some adjustments before finalizing the financial statements. The adjustment of
b.
To determine
The impact on assets and liabilities in terms of absolute dollar impact and percentage change if the company makes the least conservative choices.
c.
To determine
The impact on the current ratio and debt to equity ratio of the given adjustments in most and least conservative choices.
d.
To determine
To explain: Whether management will take care about the choices related to given adjustments.
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Cullumber Company has these comparative balance sheet data:
CULLUMBER COMPANYBalance SheetsDecember 31
2020
2019
Cash
$ 16,350
$ 32,700
Accounts receivable (net)
76,300
65,400
Inventory
65,400
54,500
Plant assets (net)
218,000
196,200
$376,050
$348,800
Accounts payable
$ 54,500
$ 65,400
Mortgage payable (15%)
109,000
109,000
Common stock, $10 par
152,600
130,800
Retained earnings
59,950
43,600
$376,050
$348,800
Additional information for 2020:
1.
Net income was $34,000.
2.
Sales on account were $383,300. Sales returns and allowances amounted to $26,600.
3.
Cost of goods sold was $200,600.
4.
Net cash provided by operating activities was $59,000.
5.
Capital expenditures were $26,400, and cash dividends were $16,500.
Compute the following ratios at December 31, 2020. (Round current ratio and inventory turnover to 2 decimal places, e.g.…
Maguindanao Computer, Inc., reports the following statement of financial position amounts as of December 31, 2020
Current asset P 2,440,500
Noncurrent assets 6,285,500
Current liabilities 1,386,000
Noncurrent liabilities 900,000
Owner’s equity 6,440,000
A review of account balances reveals the following data
An analysis of current assets discloses the following:
Cash
P 422,500
Investment securities-trading
600,000
Trade accounts receivable
568,000
Inventories, including advertising supplies of P20,000
850,000
2,440,500
2. Noncurrent assets include the following:
Property, plant and equipment:
Depreciated book value (cost P 6,560,000)
5,490,000
Deposit with a supplier for…
Carla Vista Co. has these comparative balance sheet data:
CARLA VISTA CO.Balance SheetsDecember 31
2020
2019
Cash
$ 16,140
$ 32,280
Accounts receivable (net)
75,320
64,560
Inventory
64,560
53,800
Plant assets (net)
215,200
193,680
$371,220
$344,320
Accounts payable
$ 53,800
$ 64,560
Mortgage payable (15%)
107,600
107,600
Common stock, $10 par
150,640
129,120
Retained earnings
59,180
43,040
$371,220
$344,320
Additional information for 2020:
1.
Net income was $32,500.
2.
Sales on account were $392,900. Sales returns and allowances amounted to $27,300.
3.
Cost of goods sold was $217,300.
4.
Net cash provided by operating activities was $57,200.
5.
Capital expenditures were $30,000, and cash dividends were $19,000.
Compute the following ratios at December 31, 2020. (Round current ratio and inventory turnover to 2 decimal places, e.g. 1.83…
Chapter 6 Solutions
Intermediate Accounting
Ch. 6 - What are the limitations of the balance sheet?Ch. 6 - What does a firms liquidity measure?Ch. 6 - Prob. 6.3QCh. 6 - What are the four major components of stockholders...Ch. 6 - Prob. 6.5QCh. 6 - Prob. 6.6QCh. 6 - Where is accumulated other comprehensive income...Ch. 6 - Prob. 6.8QCh. 6 - Prob. 6.9QCh. 6 - What are the two main balance sheet formats?...
Ch. 6 - Prob. 6.11QCh. 6 - Prob. 6.12QCh. 6 - What are the two formatting options for reporting...Ch. 6 - What is financial statement articulation?Ch. 6 - How is net income closed? Is the closing entry the...Ch. 6 - Why are the notes to the financial statements an...Ch. 6 - Prob. 6.17QCh. 6 - What is a subsequent event?Ch. 6 - What is a subsequent event under IFRS?Ch. 6 - How do firms report a material subsequent event on...Ch. 6 - Prob. 6.21QCh. 6 - Over what period must management assess the...Ch. 6 - Prob. 6.23QCh. 6 - Prob. 6.24QCh. 6 - Prob. 6.25QCh. 6 - Prob. 6.26QCh. 6 - Prob. 6.27QCh. 6 - Prob. 6.28QCh. 6 - Prob. 6.29QCh. 6 - Prob. 6.30QCh. 6 - Prob. 6.31QCh. 6 - Who is responsible for designing and implementing...Ch. 6 - Prob. 6.33QCh. 6 - What are the two key measures of liquidity?...Ch. 6 - What does the debt-to-equity ratio measure for a...Ch. 6 - What does a high current ratio indicate about a...Ch. 6 - Is it useful to compare working capital among...Ch. 6 - Sykes Corporations comparative balance sheets at...Ch. 6 - During Year 1, Brianna Company had the following...Ch. 6 - Which of the following items would not be included...Ch. 6 - Kong Co. purchased a three-month U.S. Treasury...Ch. 6 - Prob. 6.5MCCh. 6 - Prob. 6.6MCCh. 6 - In its year-end income statement, Black Knights...Ch. 6 - On is current year income statement, Vegas...Ch. 6 - Advantages of the Statement of Financial Position....Ch. 6 - Prob. 6.2BECh. 6 - Prob. 6.3BECh. 6 - Account Classification: Current and Noncurrent...Ch. 6 - Classified Balance Sheet. Armstrong Associates...Ch. 6 - Classified Balance Sheet, Report Format. Martell...Ch. 6 - Classified Balance Sheet, Account Format. Using...Ch. 6 - Classified Balance Sheet. Report Format.Bowe...Ch. 6 - Classified Balance Sheet, Account Format. Using...Ch. 6 - Classification as Operating. Investing, or...Ch. 6 - Prob. 6.11BECh. 6 - Classification as Operating, Investing, or...Ch. 6 - Classification as Operating. Investing, or...Ch. 6 - Classification as Operating, Investing, or...Ch. 6 - Classification as Operating, Investing, or...Ch. 6 - Classification as Operating, Investing, or...Ch. 6 - Classification as Operating, Investing, or...Ch. 6 - Prob. 6.18BECh. 6 - Statement of Cash Flows, Indirect Method. Identity...Ch. 6 - Financial Statement Articulation. Complete the...Ch. 6 - Prob. 6.21BECh. 6 - Prob. 6.22BECh. 6 - Prob. 6.23BECh. 6 - Prob. 6.24BECh. 6 - Statement of Cash Flows, Indirect Method. Tennis...Ch. 6 - Statement of Cash Flows, Direct Method. Use the...Ch. 6 - Prob. 6.27BECh. 6 - Ratio Analyses. Green Grasshopper Incorporated is...Ch. 6 - Classification of Assets and Liabilities. Darin...Ch. 6 - Prob. 6.2ECh. 6 - Prob. 6.3ECh. 6 - Prob. 6.4ECh. 6 - Prepare Balance Sheet. Blackburn Building Products...Ch. 6 - Prepare Balance Sheet. Lake Company provided the...Ch. 6 - Statement of Cash Flows, Indirect Method. Tulsa...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Prob. 6.11ECh. 6 - Financial Statement Articulation. Use the...Ch. 6 - Prob. 6.13ECh. 6 - Prob. 6.14ECh. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Prob. 6.18ECh. 6 - Prepare Balance Sheet. Larkin Corporation provided...Ch. 6 - Prob. 6.2PCh. 6 - Prepare Balance Sheet. Jennings Incorporated...Ch. 6 - Prepare Stockholders Equity Section of Balance...Ch. 6 - Prepare Stockholders Equity Section of Balance...Ch. 6 - Prepare Classified Balance Sheet.Centre Company...Ch. 6 - Prepare a classified balance sheet at December 31...Ch. 6 - Prob. 6.8PCh. 6 - Statement of Cash Flows, Operating Activities...Ch. 6 - Statement of Cash Flows, Operating Activities...Ch. 6 - Statement of Cash Flows, Direct Method. Prepare...Ch. 6 - Statement of Cash Flows, Indirect Method. Prepare...Ch. 6 - Prob. 6.13PCh. 6 - Statement of Cash Flows, Operating Activities...Ch. 6 - Statement of Cash Flows, Direct Method. Prepare...Ch. 6 - Prob. 6.16PCh. 6 - Prob. 1JCCh. 6 - Prob. 1FSCCh. 6 - Prob. 1SSCCh. 6 - Surfing the Standards Case 2: True and Fair...Ch. 6 - Basis for Conclusions Cases Basis for Conclusions...Ch. 6 - Prob. 2BCC
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