(d) Profit Margin(e) Return on Common Shareholders Equity(f) Inventory TurnoverPart 2)Assume Masks-R-Us Ltd. Calculated the following ratios as well. For each ratio, indication ifMasks-R-Us Ltd.'s position improved or worsened from 2019 to 2020.20202019Improved or Worsen?(a) Times interest earned6.9 times5.6 times(b) Return on assets4.7%4.1%(c) Gross profit margin52.5%53.2% 6. Selected financial information for Masks-R-Us Ltd.'s for the last 2 years is available:20202019S 30,000S 70,000S 200,000$ 500,000S 120,000S 280,000S 385,000$ 180,000$ 65,000S 220,000S 15,000S 14,750Accounts receivableInventoryTotal current assets$ 50,000$ 60,000S 160,250$ 420,250S 60,000S 140,000$ 400,000$ 190,000S 80,250S 280,250S 15,000$ 23,000Total assetsTotal curent liabilitiesTotal liabilitiesSales revenue (all credit sales)Cost of goods soldNet IncomeCommon Shareholders' EquityPreferred share dividends declared and paidCommon share dividends declared and paidAverage number of common shares60,00060,000Part 1)Using the financial information provided above, calculate the following ratios for 2020 only.(a) Current Ratio(b) Average Collection Period(c) Debt to Total Assets

Average collection period 365 / Average receivable turnover ratio Average receivable…

6. Selected financial information for Masks-R-Us Ltd.'s for the last 2 years is available: 2020 2019 Accounts receivable $ 50,000 S 60,000 S 160,250 $ 420,250 S 60,000 S 140,000 $ 400,000 S 190,000 S 80,250 S 280,250 S 15,000 $ 23,000 $ 30,000 S 70,000 $ 200,000 $ 500,000 S 120,000 S 280,000 $ 385,000 S 180,000 S 65,000 $ 220,000 S 15,000 $ 14,750 Inventory Total current assets Total assets Total current liabilities Total liabilities Sales revenue (all credit sales) Cost of goods sold Net Income Common Shareholders' Equity Preferred share dividends declared and paid Common share dividends declared and paid Average number of common shares 60,000 60,000 Part 1) Using the financial information provided above, calculate the following ratios for 2020 only. (a) Current Ratio (b) Average Collection Period (c) Debt to Total Assets

6. Selected financial information for Masks-R-Us Ltd.'s for the last 2 years is available: 2020 2019 Accounts receivable $ 50,000 S 60,000 S 160,250 $ 420,250 S 60,000 S 140,000 $ 400,000 S 190,000 S 80,250 S 280,250 S 15,000 $ 23,000 $ 30,000 S 70,000 $ 200,000 $ 500,000 S 120,000 S 280,000 $ 385,000 S 180,000 S 65,000 $ 220,000 S 15,000 $ 14,750 Inventory Total current assets Total assets Total current liabilities Total liabilities Sales revenue (all credit sales) Cost of goods sold Net Income Common Shareholders' Equity Preferred share dividends declared and paid Common share dividends declared and paid Average number of common shares 60,000 60,000 Part 1) Using the financial information provided above, calculate the following ratios for 2020 only. (a) Current Ratio (b) Average Collection Period (c) Debt to Total Assets

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The following selected transactions relate to liabilities of United Insulation Corporation. United's…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: 2. 1 2 3. 4 6. 7. 8. 10 EOY 20 21 22 23 24 25 26 27 28 29 30 CF $300 $270 $240 $210 $180 Five…

A: Compounding interest refers to earning interest not only on principal amount but also on interest…

Q: 2020 2019 Industry Average Debt to total assets .3% .2% 50% Times interest earned 2days…

A: Leverage ratio is a financial measure that analyzes a company's capital structure by analyzing the…

Q: Consider the following note payable transactions of Caleb Video Productions. 2018 Oct. 1…

A: Definition: Liabilities: The claims creditors have over assets or resources of a company are…

Q: at the end of 2021, $250,000 at the end of 2022, $2 the end of 2024). What is the amount of interest…

A: The interest expense is 10% of the balance due at the end of each year.

Q: A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1,…

A: Interest expense: A charge made by lender on the amount lent to a borrower. Borrower borrows the…

Q: On January 2, 2020, Brook Company acquired machinery by Issuing a 5%, $350,000 note due in 5 years…

A: Current portion of liability means the obligation that an entity would settle within a year and…

Q: On January 1, 2020, a bank have issued a 5-year term loan to a businessman. The following details of…

A: The time period of the loan is 5 years The interest rate per annum is 16% The repayment structure is…

Q: Prepare journal entry On 3/1/2020, $30,000 cash was borrowed on a two-year 8% note payable.…

A: Calculation of Interest to be accrued at year end =Principal x interest rate x time/12 = 30000…

Q: S Find online the annual 10 - K report for Costco Wholesale Corporation (COST) for September 28,…

A: Here's a detailed explanation for better understanding. In the context of the annual 10-K report for…

Q: On January 1, 2021, Eagle Company borrows $22,000 cash by signing a four-year, 6% installment note.…

A: The journal entries are prepared to record the transactions on the regular basis. The installment…

Q: Merlin SA started business one year ago and reported the following account balances sheet on 31…

A: Interest on financial instrument is charged on the fair value of the bond and the discount at the…

Q: Berlin AG started business one year ago and reported the following account balances sheet on 31…

A: When bonds are issued at a price higher than the face value, they are said to be issued at premium.…

Q: Excerpts from the annual report of XYZ Corporation follow: 2020 2019 Cost of goods sold Inventory…

A: Given, Tax Rate = 20%

Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

(d) Profit Margin
(e) Return on Common Shareholders Equity
(f) Inventory Turnover
Part 2)
Assume Masks-R-Us Ltd. Calculated the following ratios as well. For each ratio, indication if
Masks-R-Us Ltd.'s position improved or worsened from 2019 to 2020.
2020
2019
Improved or Worsen?
(a) Times interest earned
6.9 times
5.6 times
(b) Return on assets
4.7%
4.1%
(c) Gross profit margin
52.5%
53.2%

6. Selected financial information for Masks-R-Us Ltd.'s for the last 2 years is available:
2020
2019
S 30,000
S 70,000
S 200,000
$ 500,000
S 120,000
S 280,000
S 385,000
$ 180,000
$ 65,000
S 220,000
S 15,000
S 14,750
Accounts receivable
Inventory
Total current assets
$ 50,000
$ 60,000
S 160,250
$ 420,250
S 60,000
S 140,000
$ 400,000
$ 190,000
S 80,250
S 280,250
S 15,000
$ 23,000
Total assets
Total curent liabilities
Total liabilities
Sales revenue (all credit sales)
Cost of goods sold
Net Income
Common Shareholders' Equity
Preferred share dividends declared and paid
Common share dividends declared and paid
Average number of common shares
60,000
60,000
Part 1)
Using the financial information provided above, calculate the following ratios for 2020 only.
(a) Current Ratio
(b) Average Collection Period
(c) Debt to Total Assets

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Recording Accrued Interest Expense Alaska Inc. borrowed $16,000 by signing a one-year note payable on November 1, 2020. The note bears interest at 10% and interest is payable upon maturity of the note. a. Record this financing transaction on November 1, 2020. b. Record the year-end adjusting entry required on December 31, 2020. Hint: Prorate the annual interest of 10% for two months. c. Record the entry to repay the note on November 1, 2021. Note: Round your answers to the nearest dollar. For example, enter 50 for 50.49 and enter 51 for 50.5
A4
Twice KPOP Company disclosed the following information on December 31, 2021: SSS payable P20,000 Notes Payable P40,000 Deferred tax liability P10,000 Notes payable due to bank, 12% interest bearing note payable yearly,issued on August 31, 2021, maturing on August 31, 2022 P1,000,000 Mortgage payable, issued on March 1, 2012, maturing after 10 years P1,500,000 Accounts receivable, after deducting credit balances of customers’accounts amounting to ₱42, 500 P150,000 Required: Compute for the Current liabilities as of December 31, 2021
Assume General Motors announced a quarterly profit of $119 million for 4th quarter 2019. Below is a portion of its balance sheet. Conduct a horizontal analysis of the following line items. (Negative answers should be indicated by a minus sign. Round the "percent" answers to the nearest hundredth percent.) 2019 (dollars in millions) 2018 (dollars in millions) Difference % CHG Cash and cash equivalents $ 15,980 $ 15,499 Marketable securities 9,222 16,148 Inventories 13,642 14,324 Goodwill 1,278 Total liabilities and equity $ 103,249 $ 144,603
Universal Travel Incorporated borrowed $518,000 on November 1, 2024, and signed a twelve-month note bearing interest at 6% Prinopal and interest are payabl amount of interest payable that should be reported by Universal Travel Incorporated on December 31, 20257 Mutiple Choice 50 $31000 $5.00 $040
NEED HELP WITH II. III. IV.
On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances:Accounts Debit CreditCash $ 42,700Accounts Receivable 44,500Supplies 7,500Equipment 64,000Accumulated Depreciation $ 9,000Accounts Payable 14,600Common Stock, $1 par value 10,000Additional Paid-in Capital 80,000Retained Earnings 45,100Totals $ 158,700 $ 158,700During January 2021, the following transactions occur:January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000.January 9 Provide services to customers on account, $14,300.January 10 Purchase…
2021 2020 2019 2018 2017 Current Ratio 0.95 times 1.3 times 1.1 times 1.2 times 1.3 times Days in Accounts Receivable 50 days 45 days 40 days 35 days 30 days Days in Inventory 38 days 28 days 21 days 23 days 25 days Return on Equity 20% 15% 20% 19% 18% Debt to Total Assets 55% 45% 37% 35% 35% Profit $300,000 $250,000 $270,000 $240,000 $220,000 Discuss the trend in Profitability.
The debtors collection period of JK Limited for 2023 is expected to be 36.5 days and the creditors payment period is estimated to be 73 days.The accounts receivable balance on 31 December 2023 is expected to be R108 000. How much are the budgeted credit sales?A. R1 080 000OB. R540 000OC. R7 884 000D. R3 942 000 Do not give answer in image
Date Transaction description Obtained a loan of $41,000 from Earth Bank at a simple interest rate of 6% per year. The first interest payment is due at the end of August 2021 and the principal of the loan is to be repaid on June 1, 2024. Paid the full amount owing to Sport Borders, Check No. 603. Payment fell within discount period. Paid the full amount owing to J. J. Spud, Check No. 604. Payment fell within discount period. Made cash sales of $4,184 during the first 3 days of the month. 2 3 Purchased 6 Downhill Snowboards from Good Sports for $180 each, terms 2/10, n/30. Sold 6 Tony Eagle Mark 3 Freestyle Skateboards to Balls 'n All for $204 each, Invoice No. 501. Purchased 5 Freestyle Snowboards with cash for $170 each, Check No. 605. Purchased 5 Pipe Dream surfboards from Sports 'R Us for $150 each, terms net 30. 4 4. 7 After completing this practice set page, you should know how to record basic transactions in the journals provided below and understand the posting process in the…
2020 commmon size liabilities accounts payable $41,498.00 notes payable $18,064.00 2021 common size common based year 14.67% $46,484.00 6.38% $17,635.00 14.52% 5.50% 1.1201
13. Central Products sells a certain press for $20,000. Included in this price is an implied service contract of $800. Fifty machines were sold in 2020. Warranty expense incurred during 2020 amounted to $25,000. The company uses the sales warranty accrual method. Which entry would probably not be made in 2020? 25,000 Unearned Warranty Revenue Warranty Revenue а. 25,000 b. Cash 1,000,000 960,000 40,000 Sales Unearned Warranty Revenue Cash 40,000 с. Warranty Revenue 40,000 d. Warranty Expense 25,000 Cash 25,000