The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet .

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 1P

a.

To determine

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

a.

Expert Solution

Explanation of Solution

The current asset is calculated as follows.

Current assets=[Cash+Marketable securities+Account receivables+Inventories+Prepaid insurances and taxes]=$150,000+$200,000+$150,000+$50,000+$30,000=$580,000

The current asset is $580,000.

The current liabilities is calculated as follows.

Current liabilities=[Notes payable+Accounts payable+Income tax payable]=$50,000+$100,000+$80,000=$230,000

The current liabilities is $230,000.

The working capital is calculated as follows.

Working capital=Current assets−Current liabilites=$580,000−$230,000=$350,000

The working capital is $350,000.

The shareholders equity is calculated as follows.

Shareholders equity=[Accounts payable+Common stock+Capital surplus+Retained earnings]=$100,000+$150,000+$150,000+$70,000=$520,000

The shareholders equity is $520,000.

b.

To determine

The earnings per share when the company has a net income of $500,000.

b.

Expert Solution

Explanation of Solution

The price earning per share is calculated as follows.

Price earning ratio=Price per shareEarnings per share=$500,000$10,000=$50

The price earning per share is $50.

c.

To determine

The market price of the stock when the company issues common stock.

c.

Expert Solution

Explanation of Solution

The capital surplus value is calculated as follows.

Capital surplus=Share valueNumber of shares=$150,000$10,000=$15

The capital surplus value is $50.

The market price of the stock is calculated as follow.

Market price=Capital surplus+Par value=$15+$15=$30

The market price of the stock is $30.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 1P

a.

To determine

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

a.

Expert Solution

Explanation of Solution

The current asset is calculated as follows.

Current assets=[Cash+Marketable securities+Account receivables+Inventories+Prepaid insurances and taxes]=$150,000+$200,000+$150,000+$50,000+$30,000=$580,000

The current asset is $580,000.

The current liabilities is calculated as follows.

Current liabilities=[Notes payable+Accounts payable+Income tax payable]=$50,000+$100,000+$80,000=$230,000

The current liabilities is $230,000.

The working capital is calculated as follows.

Working capital=Current assets−Current liabilites=$580,000−$230,000=$350,000

The working capital is $350,000.

The shareholders equity is calculated as follows.

Shareholders equity=[Accounts payable+Common stock+Capital surplus+Retained earnings]=$100,000+$150,000+$150,000+$70,000=$520,000

The shareholders equity is $520,000.

b.

To determine

The earnings per share when the company has a net income of $500,000.

b.

Expert Solution

Explanation of Solution

The price earning per share is calculated as follows.

Price earning ratio=Price per shareEarnings per share=$500,000$10,000=$50

The price earning per share is $50.

c.

To determine

The market price of the stock when the company issues common stock.

c.

Expert Solution

Explanation of Solution

The capital surplus value is calculated as follows.

Capital surplus=Share valueNumber of shares=$150,000$10,000=$15

The capital surplus value is $50.

The market price of the stock is calculated as follow.

Market price=Capital surplus+Par value=$15+$15=$30

The market price of the stock is $30.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 1P

a.

To determine

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

a.

Expert Solution

Explanation of Solution

The current asset is calculated as follows.

Current assets=[Cash+Marketable securities+Account receivables+Inventories+Prepaid insurances and taxes]=$150,000+$200,000+$150,000+$50,000+$30,000=$580,000

The current asset is $580,000.

The current liabilities is calculated as follows.

Current liabilities=[Notes payable+Accounts payable+Income tax payable]=$50,000+$100,000+$80,000=$230,000

The current liabilities is $230,000.

The working capital is calculated as follows.

Working capital=Current assets−Current liabilites=$580,000−$230,000=$350,000

The working capital is $350,000.

The shareholders equity is calculated as follows.

Shareholders equity=[Accounts payable+Common stock+Capital surplus+Retained earnings]=$100,000+$150,000+$150,000+$70,000=$520,000

The shareholders equity is $520,000.

b.

To determine

The earnings per share when the company has a net income of $500,000.

b.

Expert Solution

Explanation of Solution

The price earning per share is calculated as follows.

Price earning ratio=Price per shareEarnings per share=$500,000$10,000=$50

The price earning per share is $50.

c.

To determine

The market price of the stock when the company issues common stock.

c.

Expert Solution

Explanation of Solution

The capital surplus value is calculated as follows.

Capital surplus=Share valueNumber of shares=$150,000$10,000=$15

The capital surplus value is $50.

The market price of the stock is calculated as follow.

Market price=Capital surplus+Par value=$15+$15=$30

The market price of the stock is $30.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 1P

a.

To determine

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

a.

Expert Solution

Explanation of Solution

The current asset is calculated as follows.

Current assets=[Cash+Marketable securities+Account receivables+Inventories+Prepaid insurances and taxes]=$150,000+$200,000+$150,000+$50,000+$30,000=$580,000

The current asset is $580,000.

The current liabilities is calculated as follows.

Current liabilities=[Notes payable+Accounts payable+Income tax payable]=$50,000+$100,000+$80,000=$230,000

The current liabilities is $230,000.

The working capital is calculated as follows.

Working capital=Current assets−Current liabilites=$580,000−$230,000=$350,000

The working capital is $350,000.

The shareholders equity is calculated as follows.

Shareholders equity=[Accounts payable+Common stock+Capital surplus+Retained earnings]=$100,000+$150,000+$150,000+$70,000=$520,000

The shareholders equity is $520,000.

b.

To determine

The earnings per share when the company has a net income of $500,000.

b.

Expert Solution

Explanation of Solution

The price earning per share is calculated as follows.

Price earning ratio=Price per shareEarnings per share=$500,000$10,000=$50

The price earning per share is $50.

c.

To determine

The market price of the stock when the company issues common stock.

c.

Expert Solution

Explanation of Solution

The capital surplus value is calculated as follows.

Capital surplus=Share valueNumber of shares=$150,000$10,000=$15

The capital surplus value is $50.

The market price of the stock is calculated as follow.

Market price=Capital surplus+Par value=$15+$15=$30

The market price of the stock is $30.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 2, Problem 1P

a.

To determine

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

a.

Expert Solution

Explanation of Solution

The current asset is calculated as follows.

Current assets=[Cash+Marketable securities+Account receivables+Inventories+Prepaid insurances and taxes]=$150,000+$200,000+$150,000+$50,000+$30,000=$580,000

The current asset is $580,000.

The current liabilities is calculated as follows.

Current liabilities=[Notes payable+Accounts payable+Income tax payable]=$50,000+$100,000+$80,000=$230,000

The current liabilities is $230,000.

The working capital is calculated as follows.

Working capital=Current assets−Current liabilites=$580,000−$230,000=$350,000

The working capital is $350,000.

The shareholders equity is calculated as follows.

Shareholders equity=[Accounts payable+Common stock+Capital surplus+Retained earnings]=$100,000+$150,000+$150,000+$70,000=$520,000

The shareholders equity is $520,000.

b.

To determine

The earnings per share when the company has a net income of $500,000.

b.

Expert Solution

Explanation of Solution

The price earning per share is calculated as follows.

Price earning ratio=Price per shareEarnings per share=$500,000$10,000=$50

The price earning per share is $50.

c.

To determine

The market price of the stock when the company issues common stock.

c.

Expert Solution

Explanation of Solution

The capital surplus value is calculated as follows.

Capital surplus=Share valueNumber of shares=$150,000$10,000=$15

The capital surplus value is $50.

The market price of the stock is calculated as follow.

Market price=Capital surplus+Par value=$15+$15=$30

The market price of the stock is $30.

Answer 6

Chapter 2, Problem 1P

a.

To determine

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

a.

Expert Solution

Explanation of Solution

The current asset is calculated as follows.

Current assets=[Cash+Marketable securities+Account receivables+Inventories+Prepaid insurances and taxes]=$150,000+$200,000+$150,000+$50,000+$30,000=$580,000

The current asset is $580,000.

The current liabilities is calculated as follows.

Current liabilities=[Notes payable+Accounts payable+Income tax payable]=$50,000+$100,000+$80,000=$230,000

The current liabilities is $230,000.

The working capital is calculated as follows.

Working capital=Current assets−Current liabilites=$580,000−$230,000=$350,000

The working capital is $350,000.

The shareholders equity is calculated as follows.

Shareholders equity=[Accounts payable+Common stock+Capital surplus+Retained earnings]=$100,000+$150,000+$150,000+$70,000=$520,000

The shareholders equity is $520,000.

Answer 7

Chapter 2, Problem 1P

a.

To determine

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

Answer 8

a.

Expert Solution

Explanation of Solution

The current asset is calculated as follows.

Current assets=[Cash+Marketable securities+Account receivables+Inventories+Prepaid insurances and taxes]=$150,000+$200,000+$150,000+$50,000+$30,000=$580,000

The current asset is $580,000.

The current liabilities is calculated as follows.

Current liabilities=[Notes payable+Accounts payable+Income tax payable]=$50,000+$100,000+$80,000=$230,000

The current liabilities is $230,000.

The working capital is calculated as follows.

Working capital=Current assets−Current liabilites=$580,000−$230,000=$350,000

The working capital is $350,000.

The shareholders equity is calculated as follows.

Shareholders equity=[Accounts payable+Common stock+Capital surplus+Retained earnings]=$100,000+$150,000+$150,000+$70,000=$520,000

The shareholders equity is $520,000.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

The earnings per share when the company has a net income of $500,000.

b.

Expert Solution

Explanation of Solution

The price earning per share is calculated as follows.

Price earning ratio=Price per shareEarnings per share=$500,000$10,000=$50

The price earning per share is $50.

Answer 13

b.

To determine

The earnings per share when the company has a net income of $500,000.

Answer 14

b.

Expert Solution

Explanation of Solution

The price earning per share is calculated as follows.

Price earning ratio=Price per shareEarnings per share=$500,000$10,000=$50

The price earning per share is $50.

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

c.

To determine

The market price of the stock when the company issues common stock.

c.

Expert Solution

Explanation of Solution

The capital surplus value is calculated as follows.

Capital surplus=Share valueNumber of shares=$150,000$10,000=$15

The capital surplus value is $50.

The market price of the stock is calculated as follow.

Market price=Capital surplus+Par value=$15+$15=$30

The market price of the stock is $30.

Answer 19

c.

To determine

The market price of the stock when the company issues common stock.

Answer 20

c.

Expert Solution

Explanation of Solution

The capital surplus value is calculated as follows.

Capital surplus=Share valueNumber of shares=$150,000$10,000=$15

The capital surplus value is $50.

The market price of the stock is calculated as follow.

Market price=Capital surplus+Par value=$15+$15=$30

The market price of the stock is $30.

Answer 21

c.

Expert Solution

Answer 22

c.

Expert Solution

Answer 23

Expert Solution

Answer 24

Ch. 2 - Prob. 1P Ch. 2 - A chemical processing firm is planning on adding a...Ch. 2 - Prob. 3P Ch. 2 - Table P2.4 shows financial statements for Apple...Ch. 2 - Prob. 5P Ch. 2 - Prob. 6P Ch. 2 - Prob. 7P Ch. 2 - Prob. 8P Ch. 2 - Prob. 9P Ch. 2 - Prob. 10P

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet .

The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.

Explanation of Solution

The earnings per share when the company has a net income of $500,000.

Explanation of Solution

The market price of the stock when the company issues common stock.

Explanation of Solution

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