Accounts             Cash  $ 4,400,000           Accounts Payable  $ 2,160,000           Prepaid Rent  $ 2,400,000           Supplies  $    320,000           Building  $ 4,000,000           Accum. Dep. Building  $ 3,200,000           Revenue  $ 3,000,000           COGS  $ 1,100,000           Entertainment Expense  $    120,000           Utility Expense  $    120,000           Depreciation Expense  $    400,000           inventory  $    800,000           Accounts Receivable  $    200,000           Supply Expense  $      80,000           Salary Expense  $    360,000           Prepaid insurance  $    600,000           Common Stock  $ 3,100,000           Retained Earnings  $ 3,120,000           Dividends  $    160,000           Income Tax Payable  $    600,000           Travel Expense  $    120,000                         Required:                           1. Create an Income Statement, Balance Sheet and Statement of Retained Earnings   2.Calculate the following ratios: current ratio, profit margin, return on assets,

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accounts

 

 

 

 

 

 

Cash

 $ 4,400,000

 

 

 

 

 

Accounts Payable

 $ 2,160,000

 

 

 

 

 

Prepaid Rent

 $ 2,400,000

 

 

 

 

 

Supplies

 $    320,000

 

 

 

 

 

Building

 $ 4,000,000

 

 

 

 

 

Accum. Dep. Building

 $ 3,200,000

 

 

 

 

 

Revenue

 $ 3,000,000

 

 

 

 

 

COGS

 $ 1,100,000

 

 

 

 

 

Entertainment Expense

 $    120,000

 

 

 

 

 

Utility Expense

 $    120,000

 

 

 

 

 

Depreciation Expense

 $    400,000

 

 

 

 

 

inventory

 $    800,000

 

 

 

 

 

Accounts Receivable

 $    200,000

 

 

 

 

 

Supply Expense

 $      80,000

 

 

 

 

 

Salary Expense

 $    360,000

 

 

 

 

 

Prepaid insurance

 $    600,000

 

 

 

 

 

Common Stock

 $ 3,100,000

 

 

 

 

 

Retained Earnings

 $ 3,120,000

 

 

 

 

 

Dividends

 $    160,000

 

 

 

 

 

Income Tax Payable

 $    600,000

 

 

 

 

 

Travel Expense

 $    120,000

 

 

 

 

 

 

 

 

 

 

 

 

Required:

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Create an Income Statement, Balance Sheet and Statement of Retained Earnings

 

2.Calculate the following ratios: current ratio, profit margin, return on assets, debt to equity, and interest coverage.

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