Financial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134833132
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 8.10AE
1.
To determine
To describe: The liabilities of Incorporation E and state how the liability arose.
2.
To determine
To calculate: The company’s total assets at December 31, 2018.
3.
To determine
To calculate: The Company’s accounts payable turnover and days’ payable outstanding (DPO) for 2017 and 2018.
To determine
To calculate: The company’s
To determine
To evaluate: Whether the company’s ability to cover accounts payable and current liabilities has improved or deteriorated over the year.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
E6-17. Liquidity Analyses. [Learning Objective B] Use the following excerpt of Dragonfly
Corporation's asset balances to compute Dragonfly's working capital and current ratio for
2023 and 2022. Comment on Dragonfly's liquidity and changes in liquidity from 2022 to
2023. Dragonfly's current liabilities are $89,754 million and $82,271 million in 2023 and
2022, respectively.
Assets (dollars in millions)
Current assets
Cash and cash equivalents
Marketable securities
Accounts receivable trade-net
Inventories
Prepaid expenses and other receivables
Total current assets
Property, plant, and equipment-net
Other assets
Total assets
2023
$ 13,420
7623
22,120
47415
1,312
91,890
67045
3,773
$162,708
$ 19,355
2,394
20,872
45,630
1,264
89,515
65.762
3,770
$159.047
S1-12. (Learning Objective 4: Construct an income statement) MacKensie ServicesCorporation began 2018 with total assets of $230 million and ended 2018 with totalassets of $365 million. During 2018, MacKensie earned revenues of $394 million and hadexpenses of $171 million. MacKensie declared and paid dividends of $27 million in 2018.Prepare the company’s income statement for the year ended December 31, 2018, completewith an appropriate heading.
E3-39B. (Learning Objective 6: Analyze and evaluate liquidity and debt-paying ability) BurnesConsulting Company reported these ratios at December 31, 2018 (dollar amounts in millions):Current ratio = $20 = 2.00 $10 $60 Debt ratio = = 0.50 $30Burnes Consulting completed these transactions during 2019:a. Purchased equipment on account, $4b. Paid long-term debt, $7c. Collected cash from customers in advance, $5d. Accrued interest expense, $6e. Made cash sales, $8Determine whether each transaction improved or hurt the company’s current ratio and debt ratio.
Chapter 8 Solutions
Financial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
Ch. 8 - All of the following are reported as current...Ch. 8 - Prob. 2QCCh. 8 - Prob. 3QCCh. 8 - What is accounts payable turnover? a.Purchases on...Ch. 8 - Prob. 5QCCh. 8 - Nicholas Corporation accrues the interest expense...Ch. 8 - Phoebe Corporation signed a six-month note payable...Ch. 8 - Prob. 8QCCh. 8 - Backpack Co. was organized to sell a single...Ch. 8 - Prob. 10QC
Ch. 8 - Potential liabilities that depend on future events...Ch. 8 - A contingent liability should be recorded in the...Ch. 8 - Prob. 8.1ECCh. 8 - Prob. 8.1SCh. 8 - Prob. 8.2SCh. 8 - Prob. 8.3SCh. 8 - Prob. 8.4SCh. 8 - (Learning Objective 3: Account for a short-term...Ch. 8 - Prob. 8.6SCh. 8 - (Learning Objective 4: Report warranties in the...Ch. 8 - (Learning Objective 4: Account for accrued...Ch. 8 - (Learning Objective 5: Interpret a companys...Ch. 8 - Prob. 8.10AECh. 8 - Prob. 8.11AECh. 8 - LO 3 (Learning Objective 3: Purchase inventory,...Ch. 8 - (Learning Objective 3: Record note payable...Ch. 8 - (Learning Objective 3: Account for a short-term...Ch. 8 - Prob. 8.15AECh. 8 - Prob. 8.16AECh. 8 - Prob. 8.17AECh. 8 - Prob. 8.18AECh. 8 - Prob. 8.19AECh. 8 - Prob. 8.20BECh. 8 - Prob. 8.21BECh. 8 - LO 3 (Learning Objective 3: Purchase inventory,...Ch. 8 - Prob. 8.23BECh. 8 - Prob. 8.24BECh. 8 - Prob. 8.25BECh. 8 - Prob. 8.26BECh. 8 - Prob. 8.27BECh. 8 - (Learning Objectives 1, 2, 3, 4: Report current...Ch. 8 - Prob. 8.29BECh. 8 - Prob. 8.30QCh. 8 - For the purpose of classifying liabilities as...Ch. 8 - Prob. 8.32QCh. 8 - Prob. 8.33QCh. 8 - Prob. 8.34QCh. 8 - Prob. 8.35QCh. 8 - Prob. 8.36QCh. 8 - Prob. 8.37QCh. 8 - Prob. 8.38QCh. 8 - Prob. 8.39QCh. 8 - Prob. 8.40QCh. 8 - Prob. 8.41QCh. 8 - Prob. 8.42QCh. 8 - Prob. 8.43QCh. 8 - Group A LO 1, 2, 3, 4 (Learning Objective 1, 2, 3,...Ch. 8 - Prob. 8.45APCh. 8 - LO 1, 2, 3, 4 (Learning Objectives 1, 2, 3, 4:...Ch. 8 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 8 - Group B LO 1, 2, 3, 4 (Learning Objectives 1, 2,...Ch. 8 - Prob. 8.49BPCh. 8 - Prob. 8.50BPCh. 8 - Prob. 8.51BPCh. 8 - Prob. 8.52CEPCh. 8 - Prob. 8.53SCCh. 8 - Prob. 8.54DCCh. 8 - Prob. 8.55DCCh. 8 - Prob. 8.56EICCh. 8 - Prob. 1FFCh. 8 - Prob. 1GP
Knowledge Booster
Similar questions
- 3-28A. (Learning Objective 6: Analyze and evaluate liquidity and debt-paying ability)Peyton Company reported these ratios at December 31, 2018 (dollar amounts in millions):Current ratio = $20 = 2.00 $10$70 Debt ratio = = 0.57 $40Peyton Company completed these transactions during 2019:a. Purchased equipment on account, $5b. Paid long-term debt, $5c. Collected cash from customers in advance, $4d. Accrued interest expense, $3e. Made cash sales, $7Determine whether each transaction improved or hurt the company’s current ratio and debt ratio.arrow_forwardE1-31A. (Learning Objective 4: Construct an income statement, statement of retainedearnings, and balance sheet) During 2018, Edwin Company earned revenues of $150million. Edwin incurred, during that same year, salary expense of $34 million, rent expenseof $23 million, and utilities expense of $16 million. Edwin declared and paid dividends of$16 million during the year. At December 31, 2018, Edwin had cash of $185 million, accountsreceivable of $70 million, property and equipment of $35 million, and other long-term assetsof $22 million. At December 31, 2018, the company owed accounts payable of $56 millionand had a long-term note payable of $26 million. Edwin began 2018 with a balance in retainedearnings of $73 million. At December 31, 2018, Edwin had total stockholders’ equity of$230 million, which consisted of common stock and retained earnings. Edwin has a year-end ofDecember 31. Prepare the following financial statements (with proper headings) for 2018:1. Income statement,2.…arrow_forward(Learning Objective 7: Calculate return on assets) Handley Grocery Corporationreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$50,000$ 2,200$40,000$48,350$ 2,100$39,300Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forward
- P1-66A. (Learning Objectives 3, 4: Evaluate business operations; construct a statement ofcash flows) The following data come from the financial statements of Mitchell Company forthe year ended March 31, 2019 (in millions):Purchases of property,plant, and equipment for cash.... $ 2,640Net income..................................... 3,020Adjustments to reconcile netincome to net cash providedby operating activities ................ 2,420Revenues........................................ 60,100Cash, beginning of year.................. 220end of year........................... 2,775Other investing cashpayments....................................... $ 195Accounts receivable........................... 650Payment of dividends........................ 265Common stock.................................. 4,900Issuance of common stock................. 190Cash proceeds on sale ofproperty, plant, and equipment..... 25Retained earnings.............................. 12,830Cost of goods…arrow_forwardE12-24B Vertical analysis (Learning Objective 2) 15-20 min. Simpson Painting, Inc., requested that you perform a vertical analysis of its balance sheet to determine the component percentages of its assets, liabilities, and stockholders' equity. Round to the nearest tenth of a percent. P. Donnelly, Inc. Comparative Income Statement Years Ended December 31, 2018 and 2017 Revenue Expenses: Cost of Goods Sold Selling and General Expenses Interest Expense Income Tax Expense Total Expenses Net Income 2018 $500,000 $245,000 111,000 10,000 54,700 420,700 $ 79,300 2017 $439,500 $236,000 103,500 6,500 44,400 390,400 $ 49,100arrow_forward(Learning Objective 7: Calculate return on assets) Hometown Supply Companyreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$84,000$ 4,200$70,000$82,600$ 4,050$69,450Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forward
- Logano Driving School’s 2017 balance sheet showed net fixed assets of $4.2 million, and the 2018 balance sheet showed net fixed assets of $6 million. The company's 2018 income statement showed a depreciation expense of $955,000. What was net capital spending for 2018?arrow_forwardSome selected financial statement items belonging to PXR Company are given in the table below. According to this information, which of the following is Return on Assets (ROA) in 2021? Receivables 18,500 Total Assets in 2021 130,000 Current Liabilities 42,000 Total Assets in 2020 110,000 Profit before Tax 18,000 Tax 3,000 Select one: a. 0.125 b. 0.150 c. 0.205 d. 0.137arrow_forwardLogano Driving School's 2017 balance sheet showed net fixed assets of $4.4 million, and the 2018 balance sheet showed net fixed assets of $6.6 million. The company's 2018 income statement showed a depreciation expense of $845,000. What was net capital spending for 2018? Multiple Cholce $2,200,000 $-2,200,000 $-1,355,000 $3,045,000 $1,355,000arrow_forward
- (Learning Objectives 3, 4: Evaluate business operations; construct a statement ofcash flows) The following data come from the financial statements of Tidal Wave Companyfor the year ended March 31, 2019 (in millions):Purchases of property, plant,and equipment for cash.... $ 3,500Net income........................... 3,050Adjustments to reconcile netincome to net cash providedby operating activities ...... 2,380Revenues.............................. 59,400Cash, beginning of year........ 270end of year................. 1,900Other investing cashpayments............................ $ 200Accounts receivable................ 550Payment of dividends............. 360Common stock....................... 4,830Issuance of common stock...... 200Cash proceeds on sale ofproperty, plant, andequipment ......................... 60Cost of goods sold................ 37,410 Retained earnings................... 12,900Requirements1. Prepare Tidal Wave Company’s cash flow statement for the year ended March 31,…arrow_forwardRotweiler Obedience School's December 31, 2018, balance sheet showed net fixed assets of $1,730,000, and the December 31, 2019, balance sheet showed net fixed assets of $2,050,000. The company's 2019 income statement showed a depreciation expense of $322,000. What was the company's net capital spending for 2019?arrow_forwardBerhad has the following financial statement as at 31 December 2019: Jiki Berhad Statement of Financial Position as at 31 December 2019 Assets (RM) Plant (Net) 4,000,000 Research and Development 16,000,000 Cash 5,400,000 Trade Receivable (Net) 5,400,000 Interest Receivable 800,000 Inventory 2,000,000 Total Assets 33,600,000 Liabilities and Shareholders’ Equity Trade Payable 5,920,000 Loan Payable 9,300,000 Provision for warranties 300,000 Deferred tax liability 4,200,000 Share Capital 10,380,000 Retained Earnings 3,500,000 Total Liabilities and Shareholders’ Equity 33,600,000 Additional Information: a) Tax laws allow only specific bad debts. The carrying amount in the trade receivable account is after the provision of 10% provision of doubtful debts. b) Interest receivable is recorded on accrued basis however is taxable only upon receipt. c) The carrying amount of the plant is after providing accumulated depreciation of RM 6 million. As at 31…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning