Complete the balance sheet of Energy Corp., given the following information: Energy Corp. Balance Sheet as of 12/31/2019 Assets Liabilities and Stockholders’ Equity Cash and marketable securities …. Accounts payable …. Accounts receivable …. Notes payable $ 900,000 Inventories …. Total current assets …. Total current liabilities …. Long-term debt $6,000,000 Net plant and equipment …. Common stock …. Retained earnings $3,750,000 Total assets $21,000,000 Total liabilities and stockholders’ equity …. In addition, the following information is provided: Debt ratio = 40% DSO = 39 days Costs of goods sold = $2.9875 million Sales = $6.25 million Inventory turnover ratio = 3.375 Current ratio = 1.5
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
- Complete the
balance sheet of Energy Corp., given the following information:
|
Energy Corp. Balance Sheet as of 12/31/2019 |
||||
|
Assets |
|
|
Liabilities and |
|
|
Cash and marketable securities |
…. |
|
Accounts payable |
…. |
|
|
…. |
|
Notes payable |
$ 900,000 |
|
Inventories |
…. |
|
|
|
|
Total current assets |
…. |
|
Total current liabilities |
…. |
|
|
|
|
Long-term debt |
$6,000,000 |
|
Net plant and equipment |
…. |
|
Common stock |
…. |
|
|
|
|
|
$3,750,000 |
|
Total assets |
$21,000,000 |
|
Total liabilities and stockholders’ equity |
…. |
|
|
|
|
|
|
In addition, the following information is provided:
- Debt ratio = 40%
- DSO = 39 days
- Costs of goods sold = $2.9875 million
- Sales = $6.25 million
- Inventory turnover ratio = 3.375
Current ratio = 1.5
- For the year ending March 31, 2019, Northern Air Cooling Corporation has:
- Total assets = $109,931,999
- ROA = 9.67 %
- ROE = 11.19 %
- Net profit margin = 10.59 %
Determine the following:
- Net income: _____________
- Sales: _____________
- Equity Multiplier: _____________
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
