Homework Help is Here – Start Your Trial Now!
Business
Accounting
Indicate the effects (increase, decrease or no effect) of each of the following independent transactions on: 1. the rate of return on shareholders ’ equity 2. the current ratio 3. the debt-to-equity ratio. State any necessary assumptions. a) Inventory costing $410 000 is purchased on account. b) Inventory costing $240 000 is sold on account for $300 000. c) Collections from customers on accounts receivable total $100 000.

Indicate the effects (increase, decrease or no effect) of each of the following independent transactions on: 1. the rate of return on shareholders ’ equity 2. the current ratio 3. the debt-to-equity ratio. State any necessary assumptions. a) Inventory costing $410 000 is purchased on account. b) Inventory costing $240 000 is sold on account for $300 000. c) Collections from customers on accounts receivable total $100 000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Effect of transactions on ratios

Indicate the effects (increase, decrease or no effect) of each of the following independent transactions on:

1. the rate of return on shareholders ’ equity

2. the current ratio

3. the debt-to-equity ratio.

State any necessary assumptions.

a) Inventory costing $410 000 is purchased on account.

b) Inventory costing $240 000 is sold on account for $300 000.

c) Collections from customers on accounts receivable total $100 000.

d) Payments to suppliers on accounts payable total $160 000.

e) A machine costing $80 000, on which $60 000 of depreciation was charged, is sold for $20 000.

f) Dividends of $80 000 are declared. The dividends will be paid during the next accounting period.

g) Ordinary shares are issued for $175 000.

h) A machine costing $60 000 is acquired. Cash of $10 000 is given, and a note for $50 000 payable five years from now is signed for the balance of purchase price.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS

Expert Answers to Latest Homework Questions

Q: is a nurse a leader in healthcare or a futurist?
Q: Bit in a bind with the math
Q: What is the general problem statement of the leaders lack an understanding and how to address job…
Q: Explain the macro practice conceptual framework: The intersection of problem, population, and arena.…
Q: Considering these roles, advocacy, community organizing, policy development, and program planning.…
Q: Determine the moments of the force about the x and the a axes. O 4 m F = {-40i +20j + 10k} N 3 m 6 m…
Q: The shape of radishes may be long (SL/SL), oval (SL/SS), or round (SS/SS), and the color of radishes…
Q: What is the reading on the vernier calipers? 7 6 0 5 10 8
Q: Discuss the possible change CRM will have in the next 3 years. Also, discuss 3 possible steps a…
Q: what is your definition of a nurse?
Q: Please please please answer everything correctly and as fast as possible please it’s super important…
Q: Find the ratio of the diameter of silver to iron wire, if they have the same resistance per unit…
Q: Identify two opportunities and two challenges presented by your cultural heritage or spiritual…
Q: 30. Repeat Problem 28, except using a shaft that is rotating and transmitting a torque of 150 N⚫m…
Q: 28. The shaft shown in Figure P5-28 is supported by bear- ings at each end, which have bores of 20.0…
Q: 28. The shaft shown in Figure P5-28 is supported by bear- ings at each end, which have bores of 20.0…
Q: 12. Compute the estimated actual endurance limit for SAE 4130 WQT 1300 steel bar with a rectangular…
Q: 6. A part of the structure for a factory automation system is a beam that spans 30.0 in as shown in…
Q: 2. A strut in a space frame has a rectangular cross section of 10.0 mm by 30.0 mm. It sees a load…
Q: STRUCTURES I Homework #1: Force Systems Name: TA: PROBLEM 1 Determine the horizontal and vertical…
Q: Find the ratio of the diameter of silver to iron wire, if they have the same resistance per unit…