ome recent financial statements for Smolira Golf, Inc., follow. SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 3,211 $ 3,307 Accounts payable $ 2,153 $ 2,600 Accounts receivable 4,767 5,781 Notes payable 1,750 2,116 Inventory 12,478 13,782 Other 90 107 Total $ 20,456 $ 22,870 Total $ 3,993 $ 4,823 Long-term debt $ 13,400 $ 16,160 Owners’ equity Common stock and paid-in surplus $ 38,000 $ 38,000 Fixed assets Accumulated retained earnings 15,654 39,112 Net plant and equipment $ 50,591 $ 75,225 Total $ 53,654 $ 77,112 Total assets $ 71,047 $ 98,095 Total liabilities and owners’ equity $ 71,047 $ 98,095 SMOLIRA GOLF, INC. 2019 Income Statement Sales $ 187,370 Cost of goods sold 126,203 Depreciation 5,333 EBIT $ 55,834 Interest paid 1,430 Taxable income $ 54,404 Taxes 19,041 Net income $ 35,363 Dividends $ 11,905 Retained earnings 23,458 Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the profitability ratios as a percent.) 2019 Long terrm solvency ratios J Times interest earned ratio ? times K Cash coverage ratio ? times
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
| Some recent financial statements for Smolira Golf, Inc., follow. |
| SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 |
||||||||||
| 2018 | 2019 | 2018 | 2019 | |||||||
| Assets | Liabilities and Owners’ Equity | |||||||||
| Current assets | Current liabilities | |||||||||
| Cash | $ | 3,211 | $ | 3,307 | Accounts payable | $ | 2,153 | $ | 2,600 | |
| Accounts receivable | 4,767 | 5,781 | Notes payable | 1,750 | 2,116 | |||||
| Inventory | 12,478 | 13,782 | Other | 90 | 107 | |||||
| Total | $ | 20,456 | $ | 22,870 | Total | $ | 3,993 | $ | 4,823 | |
| Long-term debt | $ | 13,400 | $ | 16,160 | ||||||
| Owners’ equity | ||||||||||
| Common stock | ||||||||||
| and paid-in surplus | $ | 38,000 | $ | 38,000 | ||||||
| Fixed assets | |
15,654 | 39,112 | |||||||
| Net plant and equipment | $ | 50,591 | $ | 75,225 | Total | $ | 53,654 | $ | 77,112 | |
| Total assets | $ | 71,047 | $ | 98,095 | Total liabilities and owners’ equity | $ | 71,047 | $ | 98,095 | |
| SMOLIRA GOLF, INC. 2019 Income Statement |
||
| Sales | $ | 187,370 |
| Cost of goods sold | 126,203 | |
| |
5,333 | |
| EBIT | $ | 55,834 |
| Interest paid | 1,430 | |
| Taxable income | $ | 54,404 |
| Taxes | 19,041 | |
| Net income | $ | 35,363 |
| Dividends | $ | 11,905 |
| Retained earnings | 23,458 | |
| Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the profitability ratios as a percent.) |
|
2019 Long terrm solvency ratios J Times interest earned ratio ? times K Cash coverage ratio ? times |
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