Presented here are the comparative balance sheets of Hames Inc. at December 31, 2020 and 2019. Sales for the year ended December 31, 2020, totaled $680,000. HAMES INC.Balance SheetsDecember 31, 2020 and 2019 2020 2019 Assets Cash $ 19,000 $ 20,000 Accounts receivable 78,000 72,000 Merchandise inventory 103,000 99,000 Total current assets $ 200,000 $ 191,000 Land 50,000 40,000 Plant and equipment 125,000 110,000 Less: Accumulated depreciation (65,000 ) (60,000 ) Total assets $ 310,000 $ 281,000 Liabilities Short-term debt $ 18,000 $ 17,000 Accounts payable 64,000 75,500 Other accrued liabilities 20,000 18,000 Total current liabilities $ 102,000 $ 110,500 Long-term debt 22,000 30,000 Total liabilities $ 124,000 $ 140,500 Stockholders’ Equity Common stock, no par, 100,000 shares authorized40,000 and 25,000 shares issued, respectively $ 74,000 $ 59,000 Retained earnings: Beginning balance $ 81,500 $ 85,000 Net income for the year 50,500 1,500 Dividends for the year (20,000 ) (5,000 ) Ending balance $ 112,000 $ 81,500 Total stockholders’ equity $ 186,000 $ 140,500 Total liabilities and stockholders’ equity $ 310,000 $ 281,000 Calculate the current ratio at December 31, 2020. (Round your answer to 2 decimal places.) Calculate the acid-test ratio at December 31, 2020. (Round your answer to 2 decimal places.) Assume that on December 31, 2020, the treasurer of Hames decided to pay $15,000 of accounts payable. What impact, if any, this payment will have on the answers you calculated for parts a-d (increase, decrease, or no effect). Assume that instead of paying $15,000 of accounts payable on December 31, 2020. Hames collected $15,000 of accounts receivable. What impact, if any, this receipt will have on the answers you calculated for parts a-d (increase, decrease, or no effect). I summitted this question earlier and the answers were incorrect for the first 3 parts, I also came up with the same answers and the self checker said that they were wrong. here is the next part of the question
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.
- Presented here are the comparative
balance sheets of Hames Inc. at December 31, 2020 and 2019. Sales for the year ended December 31, 2020, totaled $680,000.
Calculate theHAMES INC.
Balance Sheets
December 31, 2020 and 20192020 2019 Assets Cash $ 19,000 $ 20,000 Accounts receivable 78,000 72,000 Merchandise inventory 103,000 99,000 Total current assets $ 200,000 $ 191,000 Land 50,000 40,000 Plant and equipment 125,000 110,000 Less: Accumulated depreciation (65,000 ) (60,000 ) Total assets $ 310,000 $ 281,000 Liabilities Short-term debt $ 18,000 $ 17,000 Accounts payable 64,000 75,500 Other accrued liabilities 20,000 18,000 Total current liabilities $ 102,000 $ 110,500 Long-term debt 22,000 30,000 Total liabilities $ 124,000 $ 140,500 Stockholders’ Equity Common stock, no par, 100,000 shares authorized
40,000 and 25,000 shares issued, respectively$ 74,000 $ 59,000 Retained earnings :Beginning balance $ 81,500 $ 85,000 Net income for the year 50,500 1,500 Dividends for the year (20,000 ) (5,000 ) Ending balance $ 112,000 $ 81,500 Total stockholders’ equity $ 186,000 $ 140,500 Total liabilities and stockholders’ equity $ 310,000 $ 281,000 current ratio at December 31, 2020. (Round your answer to 2 decimal places.) - Calculate the acid-test ratio at December 31, 2020. (Round your answer to 2 decimal places.)
- Assume that on December 31, 2020, the treasurer of Hames decided to pay $15,000 of accounts payable. What impact, if any, this payment will have on the answers you calculated for parts a-d (increase, decrease, or no effect).
- Assume that instead of paying $15,000 of accounts payable on December 31, 2020. Hames collected $15,000 of accounts receivable. What impact, if any, this receipt will have on the answers you calculated for parts a-d (increase, decrease, or no effect).
I summitted this question earlier and the answers were incorrect for the first 3 parts, I also came up with the same answers and the self checker said that they were wrong. here is the next part of the question
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