a.
Liabilities:
Liabilities are the obligations that an entity owes to outsiders. It can be both short-term as well as long-term. Short-term liabilities are the ones that need to be settled within a year or an operating cycle, whichever is shorter. Similarly, long-term liabilities are to be settled beyond one year or the operating cycle. Liabilities, both current and non-current, are shown on the face of the
Requirement 1
To report:
The total amount of liabilities for A for fiscal years ended September 28, 2019, and 2018.
b.
Assets:
Assets are the resources that an entity owns. It can be both short-term as well as long-term. Short-term assets are the ones that bring benefits to the business within a year or an operating cycle, whichever is shorter. Similarly, long-term assets are the ones from which the benefits are expected to flow into the business over several years. Assets, both current and non-current, are shown on the face of the balance sheet under the main heading assets and are further divided into sub-headings of current and non-current assets.
Requirement 2
To report:
The total amount of assets of A for fiscal years ended September 28, 2019, and 2018.
c.
Debt ratio:
Debt ratios are expressed to determine the company’s ability to pay off its entire liabilities through the resources that it owns. It means that this ratio will determine the future solvency of the company.
Requirement 3
To compute:
The debt ratio of A for the fiscal years ended September 28, 2019, and September 29, 2018.
d.
Financial leverage:
Financial leverage refers to the company’s obligations on the company’s assets. The more the financial leverage of an entity, the greater will be the risk for the company for future sustainability. As more financial leverage attracts more fixed costs, it is always advisable for every company to check for its financial leverage to be under the controllable level.
Requirement 4
Which of the fiscal year, the company employed more financial leverage?
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Chapter 2 Solutions
FINANCIAL+MANAGERIAL ACCT W/CONNECT
- respond to ceasar Companies make adjusting entries to ensure that their financial statements accurately reflect the true financial position and performance during a specific accounting period. These entries are necessary to account for revenues earned and expenses incurred that may not yet have been recorded in the books. Adjusting entries are typically made at the end of an accounting period, during the preparation of financial statements, as part of the accounting cycle. This step is crucial in aligning the company’s books with the accrual basis of accounting, where revenues and expenses are recognized when they are earned or incurred, rather than when cash is received or paid. By making these adjustments, companies can provide accurate and reliable financial information to stakeholders.arrow_forwardAccording to the accrual method of accounting, businesses make adjusting entries to ensure that their financial statements are correctly depicting their financial situation and performance. No matter when cash transactions take place, adjusting entries are required to record revenues when they are generated and expenses when they are incurred (Weygandt et al., 2022). In order to guarantee that financial statements present an accurate and impartial picture of their company's financial health, these entries help in bringing financial records into compliance with the revenue recognition and matching standards. In order to account for things like accumulated revenues, accrued expenses, depreciation, and prepaid expenses, adjusting entries are usually made at the conclusion of an accounting period prior to the preparation of financial statements (Kieso et al., 2020). By implementing these changes, businesses avoid making false representations in their financial reports, which enables…arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.]Brianna's Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Brianna's Boutique uses a periodic inventory system. Date Transactions Units Unit Cost Total Cost October 1 Beginning inventory 6 $830 $4,980 October 4 Sale 4 October 10 Purchase 5 840 4,200 October 13 Sale 3 October 20 Purchase 4 850 3,400 October 28 Sale 7 October 30 Purchase 6 860 5,160 $17,740 2. Using FIFO, calculate ending inventory and cost of goods sold at October 31.arrow_forward
- Why do companies make adjusting entries? When are adjusting entries made and at what point in the accounting process?arrow_forwardcorrect solution i needarrow_forwardPrepare the journal entries to account for the defined benefit pension plan in the books of Flagstaff Ltd for the year ended December 31 2020 and the pension table for the following pic.arrow_forward
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College