Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 1, Problem 2ADM
Home Depot: Ratio of liabilities to stockholders' equity
The Home Depot, Inc., is the world’s largest home improvement retailer and one of the largest retailers in the United States based on sales volume. Home Depot operates over 2,200 stores that sell a wide assortment of building, home improvement, and lawn and garden items. Home Depot recently reported the following end-of-year
| Year 3 | Year 2 | Year 1 | |
| Total assets | $40,518 | $41,804 | $40,518 |
| Total stockholders’ equity | 12,522 | 17,777 | 17,898 |
- A. Determine the total liabilities at the end of Years 1, 2, and 3.
- B. Compute the ratio of liabilities to stockholders’ equity for all three years. (Round to two decimal places.)
- C. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years?
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The following data were selected from the records of Fluwars Company for the year ended December 31, current year:
Balances at January 1, current year:
Accounts receivable (various customers)
$
111,500
Allowance for doubtful accounts
11,200
The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return.
The following transactions occurred during the current year:
Sold merchandise for cash, $252,000.
Sold merchandise to Abbey Corp; invoice amount, $36,000.
Sold merchandise to Brown Company; invoice amount, $47,600.
Abbey paid the invoice in (b) within the discount period.
Sold merchandise to Cavendish Inc.; invoice amount, $50,000.
Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods.
Brown paid its account in full within the discount period.
Sold merchandise to Decca Corporation; invoice amount, $42,400.
Cavendish paid its account in full after the…
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Chapter 1 Solutions
Financial & Managerial Accounting
Ch. 1 - Name some users of accounting information.Ch. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQCh. 1 - Describe the difference between an account...Ch. 1 - A business had revenues of 679,000 and operating...Ch. 1 - Prob. 9DQCh. 1 - The financial statements are interrelated. What...
Ch. 1 - Prob. 1.1BECh. 1 - Prob. 1.2BECh. 1 - Transactions Interstate Delivery Service is owned...Ch. 1 - Income statement The revenues and expenses of...Ch. 1 - Prob. 1.5BECh. 1 - Balance sheet Using the following data for...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Types of businesses The following is a list of...Ch. 1 - Prob. 1.2EXCh. 1 - Prob. 1.3EXCh. 1 - Accounting equation The total assets and total...Ch. 1 - Prob. 1.5EXCh. 1 - Accounting equation Determine the missing amount...Ch. 1 - Prob. 1.7EXCh. 1 - Asset, liability, and stockholders equity items...Ch. 1 - Effect of transactions on accounting equation What...Ch. 1 - Effect of transactions on accounting equation A. A...Ch. 1 - Effect of transactions on stockholders equity...Ch. 1 - Transactions The following selected transactions...Ch. 1 - Nature of transactions Teri West operates her own...Ch. 1 - Net income and dividends The income statement for...Ch. 1 - Net income and stockholders equity for four...Ch. 1 - Balance sheet items From the following list of...Ch. 1 - Income statement items From the following list of...Ch. 1 - Prob. 1.18EXCh. 1 - Income statement Imaging Services was organized on...Ch. 1 - Missing amounts from balance sheet and income...Ch. 1 - Balance sheets, net income Financial information...Ch. 1 - Financial statements Each of the following items...Ch. 1 - Statement of cash flows Indicate whether each of...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Financial statements We-Sell Realty, organized as...Ch. 1 - Transactions On September 1 of the current year,...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Seth Feye established...Ch. 1 - Transactions; financial statements On August 1,...Ch. 1 - Transactions; financial statements DLite Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Transactions Amy Austin established an insurance...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Jose Loder established Bronco...Ch. 1 - Prob. 1.4BPRCh. 1 - Transactions; financial statements Bevs Dry...Ch. 1 - Missing amount from financial statements The...Ch. 1 - Peyton Smith enjoys listening to all types of...Ch. 1 - Prob. 1ADMCh. 1 - Home Depot: Ratio of liabilities to stockholders'...Ch. 1 - Lowes: Ratio of liabilities to stockholders equity...Ch. 1 - Prob. 4ADMCh. 1 - Ethics in Action Marco Brolo is one of three...Ch. 1 - Prob. 1.3TIF
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- Financial accountingarrow_forwardGiven the solution and accounting questionarrow_forwardThe following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000.Sold merchandise to Abbey Corp; invoice amount, $36,000.Sold merchandise to Brown Company; invoice amount, $47,600.Abbey paid the invoice in (b) within the discount period.Sold merchandise to Cavendish Inc.; invoice amount, $50,000.Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods.Brown paid its account in full within the discount period.Sold merchandise to Decca Corporation; invoice amount, $42,400.Cavendish paid its account in full after the discount…arrow_forward
- Given solution general accountingarrow_forwardanswer plzarrow_forwardThe following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500 Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000. Sold merchandise to Abbey Corp; invoice amount, $36,000. Sold merchandise to Brown Company; invoice amount, $47,600. Abbey paid the invoice in (b) within the discount period. Sold merchandise to Cavendish Inc.; invoice amount, $50,000. Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods. Brown paid its account in full within the discount period. Sold merchandise to Decca Corporation; invoice amount, $42,400. Cavendish paid its account in full after the…arrow_forward
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