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Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 15, Problem 4PA
O’Brien Industries Inc. is a book publisher. The comparative unclassified balance sheets for December 31, 2017 and 2016 follow. Selected missing balances are shown by letters.
Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, 2016, are as follows:
Note 2. The investment in Jolly Roger Co. stock is an equity method investment representing 30% of the outstanding shares of Jolly Roger Co. The following selected investment transactions occurred during 2017:
May 5. | Purchased 3,080 shares of Gozar Inc. at $30 per share including brokerage commission. Gozar Inc. is classified as an available-for-sale security. |
Oct. 1. | Purchased $40,000 of Nightline Co. 6%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. |
9. | Dividends of $12,500 are received on the Jolly Roger Co. investment. |
Dec. 31. | Jolly Roger Co. reported a total net income of $112,000 for 2017. O’Brien Industries Inc. recorded equity earnings for its share of Jolly Roger Co. net income. |
31. | Accrued three months of interest on the Nightline bonds. |
31. | Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts: |
31. | Closed the O’Brien Industries Inc. net income of $146,230. O’Brien Industries Inc. paid no dividends during the year. |
Instructions
Determine the missing letters in the unclassified
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Epsilon Golf Company's balance sheet at December 31, 2021 is as follows:
(Click the icon to view the balance sheet.)
Requirement
1. Perform a vertical analysis of Epsilon Golf Company's balance sheet to determine the component percentages of its assets, liabilities, and stockholders' equity. (Round the percentages to the nearest
hundredth percent, X.XX%. Do not enter the % symbol in any of the input fields.)
Assets
Total current assets
Property, plant, and equipment, net
Other assets
Total assets
Liabilities
Total current liabilities
December 31, 2021
Long-term debt
Total liabilities
Stockholders' Equity
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
$
$
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42,465
203,775
38,760
285,000
46,455
107,730
154,185
130,815
285,000
% of total
%
%
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%
Following balances are extracted from the books of City Light Supply Corporation
$
as on 31st March, 2016 :
$
Equity Shares
Debentures
Sundry Creditors on Open Accounts
Depreciation Fund
Capital Expenditure on 31-3-2015
Capital Expenditure during 2015-16
Sundry Debtors for Current Supplied
Other Debtors
Stores in Hand
Cash in Hand
Cost of Generation of Electricity
Cost of Distribution of Electricity
Rent, Rates and Taxes
Management Expenses
Depreciation
Interest on Debentures
Interim Dividend
Sale of Current
Meter Rent
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1,64,700
60,000
300
75,000
2,85,000
18,300
12,000
150
1,500
1,500
9,000
1,500
1,500
3,600
6,000
3,000
6,000
39,000
1,500
8,550
3,49,050
3,49,050
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(b) Revenue Account
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Threads Limited manufactures nuts and bolts, which are sold to industrial users. The abbreviated financial statements for 2018 and 2019 are as follows:
See images
Dividends were paid on ordinary shares of £70,000 and £72,000 for 2018 and 2019, respectively.
Required:
(a) Calculate the following financial ratios for both 2018 and 2019 (using year-end figures for statement of financial position items):
1 return on capital employed
2 operating profifit margin
3 gross profifit margin
4 current ratio
5 acid test ratio
6 settlement period for trade receivables
7 settlement period for trade payables
8 inventories turnover period.
(b) Comment on the performance of Threads Limited from the viewpoint of a business considering supplying a substantial amount of goods to Threads Limited on usual trade credit terms.
Chapter 15 Solutions
Financial Accounting
Ch. 15.MJ - Prob. 1DQCh. 15.MJ - What is the difference between classifying an...Ch. 15.MJ - If a functional expense classification is used for...Ch. 15.MJ - Prob. 4DQCh. 15.MJ - What are two main differences in inventory...Ch. 15.MJ - Prob. 6DQCh. 15.MJ - Prob. 7DQCh. 15.MJ - Prob. 8DQCh. 15.MJ - Prob. 9DQCh. 15.MJ - How is treasury stock reported under IFRS? How...
Ch. 15.MJ - IFRS Activity 1
Unilever Group is a global company...Ch. 15.MJ - IFRS Activity 2 The following is a recent...Ch. 15.MJ - Prob. 3IFRSCh. 15 - Why might a business invest cash in temporary...Ch. 15 - What causes a gain or loss on the sale of a bond...Ch. 15 - When is the equity method the appropriate...Ch. 15 - Prob. 4DQCh. 15 - Prob. 5DQCh. 15 - Prob. 6DQCh. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - Prob. 9DQCh. 15 - Prob. 10DQCh. 15 - Prob. 1PEACh. 15 - Prob. 1PEBCh. 15 - On February 10, 15,000 shares of Sting Company are...Ch. 15 - Prob. 2PEBCh. 15 - Prob. 3PEACh. 15 - Prob. 3PEBCh. 15 - Prob. 4PEACh. 15 - Prob. 4PEBCh. 15 - Prob. 5PEACh. 15 - On January 1, 2016, Valuation Allowance for...Ch. 15 - Prob. 6PEACh. 15 - Prob. 6PEBCh. 15 - Parilo Company acquired 170,000 of Makofske Co.,...Ch. 15 - Prob. 2ECh. 15 - Prob. 3ECh. 15 - Prob. 4ECh. 15 - Prob. 5ECh. 15 - On March 4, Breen Corporation acquired 7,500...Ch. 15 - Prob. 7ECh. 15 - Prob. 8ECh. 15 - Seamus Industries Inc. buys and sells investments...Ch. 15 - Prob. 10ECh. 15 - Prob. 11ECh. 15 - Prob. 12ECh. 15 - Prob. 13ECh. 15 - JED Capital Inc. makes investments in trading...Ch. 15 - Prob. 15ECh. 15 - Prob. 16ECh. 15 - Prob. 17ECh. 15 - Prob. 18ECh. 15 - Prob. 19ECh. 15 - The investments of Steelers Inc. include a single...Ch. 15 - Prob. 21ECh. 15 - Storm, Inc. purchased the following...Ch. 15 - Prob. 23ECh. 15 - Prob. 24ECh. 15 - Prob. 25ECh. 15 - Prob. 26ECh. 15 - Prob. 27ECh. 15 - Prob. 28ECh. 15 - Prob. 29ECh. 15 - Prob. 1PACh. 15 - Prob. 2PACh. 15 - Prob. 3PACh. 15 - OBrien Industries Inc. is a book publisher. The...Ch. 15 - Prob. 1PBCh. 15 - Prob. 2PBCh. 15 - Prob. 3PBCh. 15 - Prob. 4PBCh. 15 - Selected transactions completed by Equinox...Ch. 15 - On July 16, 1998, Wyatt Corp. purchased 40 acres...Ch. 15 - International Financial Reporting Standard No. 16...Ch. 15 - Prob. 3CPCh. 15 - Berkshire Hathaway, the investment holding company...Ch. 15 - Prob. 5CP
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