Purchase Solution

Prepare income statement, balance sheet and calculate ratios

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Classified Financial Statement Preparation and Analysis

P.5 Jimenez Company sells outdoor sports equipment. At the December 31, 2009, year end, the following financial information was available from the income statement: administrative, \$ expenses, 80,800; cost of goods sold, 350,420; interest expense, \$22,640; interest income, \$2,800; net sales, \$714,390; and selling expenses, \$ 220,200.

The following information was available from the balance sheet ( after closing entries were made): accounts payable, \$32,600; accounts receivable, \$104,800; accumulated depreciation- delivery equipment, \$88,500; inventory, \$ 136,540; investment in securities (short term), \$39,600; lone-term notes payable, \$ 100,000; C. Jimenez, Capital, \$359,300 (ending balance); notes payable (short-term),\$50,000; prepaid expenses (short-term), \$5,760; and store fixtures, \$141,620.
Total assets and total owner's equity at December 31, 2008, were \$524,400 and \$ 376,170, respectively, and owners withdrawals for the year were \$60,000. The owner did not make any additional investments in the company during the year.

Required
1. From the information above, prepare
(a) an income statement in single-step form,
(b) a statement of owner's equity,
(c) a classified balance sheet.

2. From the statement you have prepared, compute the following measures:
(a) working capital and current ratio (for liquidity); and
(b) profit margin, asset turn over, return an asset, debit to equity ratio, and return on equity (for profitability)

Solution Summary

The expert prepares income statements, balance sheets and calculate ratios.

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