Concept explainers
Four different proprietorships, Jupiter, Mars, Saturn, and Venus, show the same
On the basis of the preceding data and the following additional information for the year, determine the net income (or loss) of each company for the year. (Hint: First, determine the amount of increase or decrease in owner’s equity during the year.)
Jupiter: The owner had made no additional investments in the business and had made no withdrawals from the business.
Mars: The owner had made no additional investments in the business but had withdrawn $36,000.
Saturn: The owner had made an additional investment of $60,000 but had made no withdrawals.
Venus: The owner had made an additional investment of $60,000 and had withdrawn $36,000.
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Chapter 1 Solutions
Financial Accounting
- The following data (in millions) are taken from the financial statements of Target Corporation: a. For Target Corporation, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for: 1. Revenue 2. Operating expenses 3. Operating income b. What conclusions can you draw from your analysis of the revenue and the total operating expenses?arrow_forwardThe following data (in millions) were taken from the financial statements of Costco Wholesale Corporation: a. For Costco, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for: 1. Revenue 2. Operating expenses 3. Operating income b. Comment on the results of your horizontal analysis in part (a). c. Based upon Exercise 2-23, compare and comment on the operating results of Target and Costco for the recent year.arrow_forwardThe following data were taken from the financial statements of Gates Inc. for the current fiscal year. Please see the attachment for details: Assuming that total assets were $7,000,000 at the beginning of the current fiscal year, determine the following: (a) ratio of fixed assets to long-term liabilities, (b) ratio of liabilities to stockholders’ equity, (c) asset turnover, (d) return on total assets, (e) return on stockholders’ equity, and (f) return on common stockholders’ equity. Round ratios and percentages to one decimal place as appropriate.arrow_forward
- Assume that the Current Assets for Rain Co. as of Decebmer 31, 20Y8, are listed below. A. Assume further that the total Current Liabilites on the same date are $75,000. What is the amount of the working capital for Rain Co. on December 31, 20Y8? B. Assume further that the total Current Liabilites on the same date are $75,000. What is the amount of the working capital for Rain Co. on December 31, 20Y8? ASSETS Current assets: Cash $ 17,500 Temporary Investments 15,000 Accounts Receivable (net) 42,500 Inventories 72,000 Prepaid Expenses 3,000 Total current assets $150,000arrow_forwardPlease Helparrow_forwardThe following items were selected from among the transactions completed by Sherwood Co. during the current year:Required:1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to the nearest dollar.2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):a. Product warranty cost, $29,000.b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.arrow_forward
- At the beginning of the year, Vickey BarneyCompany's assets amount P 7,562,432 and theowner's equity amounting to P 2,567,889. During thisyear, assets increased by P 524,332 while liabilities decreased by P 35, 589. How much is the owner'sequity at the end of the year?arrow_forwardRequired: (a) You are required to calculate the following ratios:(iv) Return on Capital Employed(v) Asset turnover(vi) Non-current asset turnover(vii) Current Ratio(viii) Quick Ratio(ix) Inventory days(x) Receivables days(xi) Payable days(xii) Interest cover (b) In light of your calculations comment on the performance of the company over thelast two years.arrow_forwardComparing Two Companies in the Same Industry: Chipotle and Panera Bread Refer to the financial information for Chipotle and Panera Bread reproduced at the back of the book and answer the following questions. What was the total revenue for each company for the most recent year? By what percentage did each companys revenue increase or decrease from its total amount in the prior year? What was each companys net income for the most recent year? By what percentage did each companys net income increase or decrease from its net income for the prior year? What was the total asset balance for each company at the end of its most recent year? Among its assets, what was the largest asset each company reported on its year-end balance sheet? Did either company pay its stockholders any dividends during the most recent year? Explain how you can tell.arrow_forward
- Given are the amounts of assets, liabilities, owner’s equity, revenues, andexpenses of AQUA Inc. at 12/31/10. The beginning amount of Retained Earnings at1/1/10 was $20,000, and during the year Dividends of $60,000 were taken out bythe owners of Aqua Inc. Prepare the yearend Balance Sheet and Income Statementfor AQUA LLP at the end of the year. (Include Correct Headings)Accounts Payable $59,000 Land $78,000Accounts Receivable 15,000 UnearnedRevenue 45,000Advertising Expense13,000 UtilitiesExpense5,000Building 160,000 Rent Expense 13,000Cash 140,000 OperatingExpenses 23,000Supplies 10,000 CommonStock 240,000 Salary payable2,000 AccumulatedDepreciation 10,000Prepaid Insurance Expense 20,000 ServiceRevenue 170,000Interest Expense9,000 Retained Earnings ?arrow_forwardComparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 500,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $1.00 last year and $0.65 this year. The market value of the company's common stock at the end of the year was $29. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: $ 1,230 9,200 13,200 $ 1,290 8,.400 Cash Accounts receivable, net Inventory Prepaid expenses 11,800 690 770 Total current assets 24,400 22,180 Property and equipment: Land 9,100 45,013 9,100 41,444 Buildings and equipment, net Total property and equipment 54,113 50,544 Total assets $78,513 $72,724 Liabilities and…arrow_forwardThe equity of an unincorporated business that makes a profit in the financial year is calculated as: Select one: a. Capital at the start of the year + capital introduced - profit for the year - drawings. b. Capital at the start of the year + capital introduced - profit for the year + drawings. c. Capital at the start of the year + capital introduced + profit for the year + drawings. d. Capital at the start of the year + capital introduced + profit for the year - drawings.arrow_forward
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