Martinez Corp. experienced a fire on December 31, 2020, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances. December 31, 2020 December 31, 2019 Cash $ 38,100 $ 11,100 Accounts receivable (net) 74,000 128,400 Inventory 204,600 183,400 Accounts payable 50,200 90,600 Notes payable 36,500 64,900 Common stock, $100 par 406,600 406,600 Retained earnings 120,000 106,300 Additional information: 1. The inventory turnover is 3.7 times. 2. The return on common stockholders’ equity is 19%. The company had no additional paid-in capital. 3. The receivables turnover is 11.8 times. 4. The return on assets is 19%. 5. Total assets at December 31, 2019, were $607,100. Compute the following for Martinez Corp.. (Round all answers to 0 decimal places, e.g. 2,150.) (a) Cost of goods sold for 2020. $ (b) Net credit sales for 2020. $ (c) Net income for 2020. $ (d) Total assets at December 31, 2020. $
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Martinez Corp. experienced a fire on December 31, 2020, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances.
|
December 31, 2020
|
December 31, 2019
|
|||
| Cash | $ 38,100 | $ 11,100 | ||
| 74,000 | 128,400 | |||
| Inventory | 204,600 | 183,400 | ||
| Accounts payable | 50,200 | 90,600 | ||
| Notes payable | 36,500 | 64,900 | ||
| Common stock, $100 par | 406,600 | 406,600 | ||
| 120,000 | 106,300 |
Additional information:
| 1. | The inventory turnover is 3.7 times. | |
| 2. | The return on common |
|
| 3. | The receivables turnover is 11.8 times. | |
| 4. | The return on assets is 19%. | |
| 5. | Total assets at December 31, 2019, were $607,100. |
Compute the following for Martinez Corp.. (Round all answers to 0 decimal places, e.g. 2,150.)
| (a) | Cost of goods sold for 2020. |
$
|
||
| (b) | Net credit sales for 2020. |
$
|
||
| (c) | Net income for 2020. |
$
|
||
| (d) | Total assets at December 31, 2020. |
$
|
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
