Fundamental Accounting Principles
Not what you're looking for?
1) Chuck McElravy owns Common Grounds Coffee House, near the campus of Manatee College. The business has cash of $2,000 and furniture that cost $8,000. Liabilities include accounts payable of $1,000 and a $6,000 note payable. How much equity does McElravy have in the business? Using the above figures, write the accounting equation of Common Grounds Coffee House.
2) Identify an outside party that would be interested in whether a liability is current or long-term. Why would this party be interested in this information?
3) Philagem, Inc. ended 2000 with net income before taxes of $218,000. The company is subject to a 40% tax rate and must pay $32,000 in preferred stock dividends before distributing any earnings on the 85,000 shares of common stock currently outstanding.
a. Calculate Philagem's 2000 earnings per share (EPS) of common stock.
b. If the firm paid common stock dividends of $0.80 per share, how many dollars would go to retained earnings?
4) Complete the 2000 balance sheet for O'Keefe Industries using the information that follows it.
Assets
Cash $ 30,000
Marketable Securities 25,000
Accounts Receivable
Inventories
Total Current Assets
Net Fixed Assets
Total Assets
Liabilities and Owner's Equity
Accounts Payable $120,000
Notes Payable
Accruals 20,000
Total Current Liabilities
Long-Term Debt
Stockholder's Equity 600,000
Total Liabilities And Equity
The following financial data for 2000 is also available:
Sales totaled $1,800,000.
The gross profit margin was 25%.
Inventory turnover was 6.0.
Assume there are 360 days in the year.
The average collection period was 40 days.
The current ratio was 1.60.
The total asset turnover ratio was 1.20.
The debt ratio was 60%.
5) How does the term structure of interest rates relate to the yield curve? For a given class of similar-risk securities, what does each of the following yield curves reflect about interest rates: (a) downward sloping; (b) upward sloping; and (c) flat?
Purchase this Solution
Solution Summary
This question involves the fundamentals of accounting
Purchase this Solution
Free BrainMass Quizzes
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.