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The equity ratio at December 20X4 was:

The equity ratio at December 20X4 was:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Manufacturing Inc. comparative balance sheet at December 31 20X4 20X3 Cash Accounts Receivable Inventory Prepaid Expenses Equipment Accumulated Depreciation - equipment Total Assets Account Payable Interest Payable Income taxes payable Dividends Payable Long-term Notes Payable Common shares Retained Earnings Total Liabilities & Shareholders' Equity Additional Information: $ 4,500 $ 4,300 $ 72,000 $ 6,500 $110,000 $140,000 $ 1,020 $100,000 $(42,000) $209,820 The equity ratio at December 20X4 was: $ 1,550 $ 98,000 $(50,000) $236,050 $ 15,330 $ 510 $ 10,800 $ 1,800 $ 50,000 $130,000 $ 27,610 $236,050 1. Operating expenses include depreciation expense of $10,000 2. Accounts Payable related to the purchase of inventory 3. Equipment that cost $8,000 was sold at a loss of $2,000 4. New equipment was purchased during the year for $6,000 5. Dividends declared and paid in 20X4 totaled $2,000 6. Common shares were sold for $10,000 cash 7. Interest payable in 20X4 was $500 greater than interest payable in 20X3 $ 9,900 $ 10 $ 9,500 $ 3,800 $ 65,000 $120,000 $ 1,610 $209,820
Transcribed Image Text:ABC Manufacturing Inc. comparative balance sheet at December 31 20X4 20X3 Cash Accounts Receivable Inventory Prepaid Expenses Equipment Accumulated Depreciation - equipment Total Assets Account Payable Interest Payable Income taxes payable Dividends Payable Long-term Notes Payable Common shares Retained Earnings Total Liabilities & Shareholders' Equity Additional Information: $ 4,500 $ 4,300 $ 72,000 $ 6,500 $110,000 $140,000 $ 1,020 $100,000 $(42,000) $209,820 The equity ratio at December 20X4 was: $ 1,550 $ 98,000 $(50,000) $236,050 $ 15,330 $ 510 $ 10,800 $ 1,800 $ 50,000 $130,000 $ 27,610 $236,050 1. Operating expenses include depreciation expense of $10,000 2. Accounts Payable related to the purchase of inventory 3. Equipment that cost $8,000 was sold at a loss of $2,000 4. New equipment was purchased during the year for $6,000 5. Dividends declared and paid in 20X4 totaled $2,000 6. Common shares were sold for $10,000 cash 7. Interest payable in 20X4 was $500 greater than interest payable in 20X3 $ 9,900 $ 10 $ 9,500 $ 3,800 $ 65,000 $120,000 $ 1,610 $209,820
ABC Manufacturing Inc. Income Statement Year Ended December 31, 20X4 Sale Cost of goods sold Gross Profit Operating Expenses Loss on Sale of equipment Profit from Operations Other expenses Interest Expense Profit before Income Tax Income Tax Expense Profit $40,000 $ 2,000 $200,000 $120,000 $ 80,000 $ 42,000 $ 38,000 $ 2,000 $ 36,000 $ 8,000 $ 28,000
Transcribed Image Text:ABC Manufacturing Inc. Income Statement Year Ended December 31, 20X4 Sale Cost of goods sold Gross Profit Operating Expenses Loss on Sale of equipment Profit from Operations Other expenses Interest Expense Profit before Income Tax Income Tax Expense Profit $40,000 $ 2,000 $200,000 $120,000 $ 80,000 $ 42,000 $ 38,000 $ 2,000 $ 36,000 $ 8,000 $ 28,000
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