Using Financial Statements for 2020, sales to working capital for the year 2020 is 2.41.True or False? **Balance Sheet (2020)***Assets*- Cash: $280,000- Accounts Receivable: $117,600- Inventory: $89,600- Prepaid Expenses: $14,000 **Total Current Assets**: $501,200 - Fixed Assets: $33,600 **Total Assets**: $534,800*Liabilities & Equity*- Accounts Payable: $90,916- Notes Payable: $48,132- Accrued Expenses: $42,784- Taxes Payable: $37,436- Deferred Taxes: $48,132 **Total Current Liabilities**: $267,400 - Long-Term Notes: $123,004 **Total Liabilities**: $390,404- Capital Stock: $53,480- Retained Earnings: $90,916 **Total Equity**: $144,396 **Total Liabilities & Equity**: $534,800**Income Statement (2020)**- Sales: $530,000- Cost of Goods Sold: $148,400 **Gross Profit**: $381,600- Interest Income: $53,600 **Total Income**: $434,600*Expenses*- Sales Salaries: $121,900- Office Salaries: $26,500- Office Equipment Rental: $37,100- Interest Expense: $15,900- General & Administrative: $4,770 **Total Expenses**: $206,170- Income Before Tax: $228,430- Income Taxes: $132,500 **Net Income**: $95,930**Analysis**- The balance sheet shows a total equity of $534,800, with a significant portion in current assets, primarily cash.- Liabilities are dominated by current liabilities, with notable amounts in long-term notes.- The income statement reveals a healthy net income of $95,930, primarily driven by sales and supplemented by interest income. Expenses are largely composed of salaries and equipment rental.

Answered: Using Financial Statements for 2020,…

Business

Accounting

Using Financial Statements for 2020, sales to working capital for the year 2020 is 2.41. True or False?

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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