Information for Patel Corporation is given below: Patel Corporation Balance Sheet December 31, 2021 24 350,000 Accounts payable 1,950,000 Income taxes payable 2,439,000 Miscellaneous accrued payables Cash 630,000 Accounts receivable (net) 189,000 275,000 Inventories Plant and equipment, net of depreciation Bonds payable (8%, due 2023) 1,875,000 1,983,000 Preferred stock ($100 par, 6% 261,000 cumulative nonparticipating) Patents 750,000 Other intangible assets 75,000 Common stock (no par, 60,000 S 7.058.000 shares authorized, issued and outstanding) Retained earnings Treasury stock-1,500 shares of preferred Total Equities Total Assets 1,125,000 2,439,000 (225,000) $ 7.058,000 Patel Corporation Income Statement Year ended December 31, 2021 $ 9,000,000 6,000,000 3,000,000 1,500,000 Net sales Cost of goods sold Gross profit Operating expenses (including bond interest expense) Income before income taxes 1,500,000 Income tax 450,000 $ 1,050,000 Net income Additional information: There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2021, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2021. Assume that preferred dividends for the current year have not been declared. Calculate the following ratios at December 31, 2021, show calculations for full credit. 1. Current ratio 2. Acid-test ratio 3. Accounts receivable turngver
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.
Patel Corporation Balance Sheet December 31, 2021 $ 630,000 189,000 275,000 1,875,000 Cash $ Accounts receivable ( net) Inventories Plant and equipment net of
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
