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    E6: The following data pertain to a sole proprietorship:

    Sales, $405,000
    Cost of Goods Sold, $220,000
    Selling Expenses, $90,000
    General and Administrative Expenses, $60,000
    Interest Expense, $4,000
    Interest Income, $3,000

    1. Prepare a condensed single-step income statement.
    2. Prepare a condensed multistep income statement.

    E7: A condensed single-step income statement for Harrington Housewares Company appears below. Present the information in a condensed multistep income statement, and tell what insights can be obtained from the multistep form as opposed to the single-step form.

    Harrington Housewares Company
    Income Statement
    For the Year Ended June 30, 20xx

    Revenues
    Net sales $1,197,132
    Interest income 5,720
    Total revenues $1,202,852

    Cost and expenses
    Cost of goods sold $777,080
    Selling expenses 203,740
    General and administrative expenses 100,688
    Interest expense 13,560
    Total costs and expenses
    1,095,068
    Net income 107,784

    E8: The following accounts and balances are from the general ledger of Swan Company.
    --Compute the (1) working capital and (2) current ratio.

    Accounts Payable $49,800
    Accounts Receivable 30,600
    Cash 4,500
    Current Portion of long-Term Debt, 30,000
    Long-Term Investments 31,200
    Marketable Securities 37,800
    Merchandise Inventory 76,200
    Notes Payable- 90 days 45,000
    Notes Payable- 2 years 60,000
    Notes Receivable- 90 days 78,000
    Notes Receivable- 2 years 30,000
    Prepaid Insurance 1,200
    Property, Plant, and Equipment 180,000
    C. Swan, Capital 84,900
    Salaries Payable 2,550
    Supplies 1,050
    Property Taxes Payable 3,750
    Unearned Revenue 2,250

    E9: The following end-of-year amounts are from the financial statements of Laliberte Company:

    Total assets, $852,000; Total liabilities, $344,000; Owner's equity, $508,000; Net sales, $1,564,000; Cost of goods sold, $972,000; Operating expenses, $404,000; and Withdrawals, $80,000. During the past year, total assets increased by $150,000. Total owner's equity was affected only by net income and withdrawals.

    --Compute (1) profit margin, (2) asset turnover, (3) return on assets, (4) debt to equity ratio, and (5) return on equity.

    E10: A simplified balance sheet and income statement for a sole proprietorship appear below. Total assets and owner's equity at the beginning of 20xx were $360,000 and $280,000, respectively.

    1. Compute the following liquidity measures: (a) working capital and (b) current ratio.
    2. Compute the following profitability measures: (a) profit margin, (b) asset turnover, (c) return on assets, (d) debt to equity ratio, and (e) return on equity.

    Balance Sheet
    December 31, 20xx

    Assets
    Liabilities
    Current assets $100,000
    Investments 20,000
    Property, plant, and equipment
    293,000
    Intangible assets 27,000

    Total assets

    $440,000
    Current liabilities $40,000
    Long-term liabilities 60,000
    Total liabilities $100,000

    Owner's Equity
    P. Cavafy, Capital $340,000
    Total liabilities and owner's equity
    $440,000

    Income Statement
    For the Year Ended December 31, 20xx

    Net sales
    Cost of goods sold
    Gross margin
    Operating expenses
    Net income $820,000
    500,000
    320,000
    270,000
    50,000

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    https://brainmass.com/business/financial-ratios/accounting-problems-89356

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    E6: The following data pertain to a sole proprietorship:

    Sales, $405,000
    Cost of Goods Sold, $220,000
    Selling Expenses, $90,000
    General and Administrative Expenses, $60,000
    Interest Expense, $4,000
    Interest Income, $3,000

    1. Prepare a condensed single-step income statement.
    2. Prepare a condensed multistep income statement.

    Prepare a condensed single-step income statement.

    Single-step income statement derives net income in a single step by putting the major revenue categories in the first part of the statement and expense categories in the second part of the statement.

    Revenues
    Sales $405,000
    Interest income 3,000
    Total revenues $408,000

    Cost and expenses
    Cost of goods sold $220,000
    Selling expenses 90,000
    General and administrative expenses 60,000
    Interest expense 4,000
    Total costs and expenses
    374,000
    Net income 34,000

    Prepare a condensed multistep income statement.

    Multi-step income statement derives net income in a step-by-step manner.

    Revenues
    Sales $405,000
    Cost of goods sold 220,000
    Gross margin 185,000
    Operating Expenses
    Selling expenses 90,000
    General and administrative expenses 60,000 150,000
    Income from operations 35,000
    Other Revenues and expenses
    Interest income 3,000
    Interest expense 4,000 1,000
    Net income 34,000

    E7: A condensed single-step income statement for Harrington Housewares Company appears below. Present the information in a condensed multistep income statement, and tell what insights can be obtained from the multistep form as opposed to the single-step form.

    Harrington Housewares Company
    Income Statement
    For the Year Ended June 30, 20xx

    Revenues
    Net sales $1,197,132
    Interest income 5,720
    Total revenues $1,202,852

    Cost and expenses
    Cost of goods sold $777,080
    Selling expenses 203,740
    General and administrative ...

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