1.Comment on the management's ability to manage the accounts receivable over the past two years. 2. What is a possible explanation for the decrease to the Wages and Salaries expense? 3. Explain the reason for the increase to the bank loan. 4. Comment on the current ratio. Is is good/bad? Why 5. Using all the information, make comments about the company’s overall performance over the past 2 years. • Complete this question using point form but fully justify your findings. • Comment on liquidity, solvency, and profitability • Would you recommend with company to investors? RETURN OF EQUITY IS 12.7%
1.Comment on the management's ability to manage the accounts receivable over the past two years. 2. What is a possible explanation for the decrease to the Wages and Salaries expense? 3. Explain the reason for the increase to the bank loan. 4. Comment on the current ratio. Is is good/bad? Why 5. Using all the information, make comments about the company’s overall performance over the past 2 years. • Complete this question using point form but fully justify your findings. • Comment on liquidity, solvency, and profitability • Would you recommend with company to investors? RETURN OF EQUITY IS 12.7%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1.Comment on the management's ability to
2. What is a possible explanation for the decrease to the Wages and Salaries expense?
3. Explain the reason for the increase to the bank loan.
4. Comment on the
5. Using all the information, make comments about the company’s
overall performance over the past 2 years.
• Complete this question using point form but fully justify your
findings.
• Comment on liquidity, solvency, and profitability
• Would you recommend with company to investors?
RETURN OF EQUITY IS 12.7%
Transcribed Image Text:9
Perry's Carpentry
Comparative Income Statement
For the years ended December 31, 20-6, 20-5
10
11
12
13
Increase (+) Decrease (-)
$'s
14
20-6
20-5
%
15
Revenue
16
Sales
152,500 133,400
19,100
14.3%
2,040
131,360
17
Sales Returns and Allowances
2,900
860
42.2%
18
Net Sales
149,600
18,240
13.9%
19
20
Cost of Goods Sold
| 21
Inventory January 1
24,000
20,300
3,700
18.2%
22
104,300
128,300
23,100
Net Purchases
86,240
18,060
21.0%
23
Cost of Goods for Sale
106,540
21,760
20.4%
24 Inventory December 31
18,000
5,100
28.3%
88,540
42,820
25
Cost of Goods Sold
105,200
44,400
16,660
1,580
18.8%
26
Gross Profit
3.7%
27
Operating Expenses
29 Advertising
Wages and Salaries
Auto expense
Depreciation
Telephone
34
28
1,530
10,700
2,030
1,070
1,390
1,450
1,110
1,400
11,590
1,970
1,240
1,110
1,370
130
9.3%
30
-890
-7.7%
31
60
3.0%
32
-170
-13.7%
33
280
25.2%
Utilities
80
5.8%
35
Bad Debt
965
145
15.0%
Interest & Bank Charges
Total Operating Expenses
38
4,510
23,790
36
4,380
24,025
130
-235
3.0%
-1.0%
37
39
Net income
20,610
18,795
1,815
9.7%
| 40
Transcribed Image Text:41
Perry's Carpentry
Comparative Balance Sheet
December 31, 20-6, 20-5
42
43
44
45
46
Increase (+) Decrease (-)
$'s
47
20-6
20-5
%
48
49
Assets
50
Current Assets
Cash
7,400
3,360
23,100
300
34,160
51
4,670
3,510
21,000
200
29,380
2,730
58.5%
52
Accounts Receivable
-150
-4.3%
2,100
100
4,780
53
Inventory
Prepaid Expenses
10.0%
50.0%
16.3%
54
55
Total Current Assets
56
57
Capital Equipment
Office Equipment
1,030
25,100
22.5%
167.3%
0.0%
0.0%
13.8%
58
5,600
40,100
50,000
120,000
215,700
4,570
15,000
59
Vehicles
60
Land
Building
Total Capital Equipment
50,000
120,000
189,570
61
62
26,130
63
64
Total Assets
249,860
218,950
30,910
14.1%
65
66
Liabilities
67
Current Liabilities
Accounts Payable
1,760
1,760
68
2,010
2,010
-250
-12.4%
69
Total Current Liabilities
-250
-12.4%
70
Long-Term Liabilities
Long-term bank loan
Mortgage Payable
Total Long-Term Liabilities
71
21,400
54,000
75,400
11,400
-850
10,550
114.0%
-1.5%
72
10,000
54,850
64,850
73
74
16.3%
75
76
Total Liabilities
77,160
66,860
10,300
15.4%
77
78
Owner's Equity
79
G. Perry, Capital
172,700
152,090
20,610
13.6%
80
81
Total Liabilities and Owner's Equ 249,860
218,950
30,910
14.1%
82
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