INTERMEDIATE ACCOUNTING-MYLAB W/ETEXT
3rd Edition
ISBN: 9780136946601
Author: GORDON
Publisher: PEARSON
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Chapter 20, Problem 1JC
a.
To determine
The percentage change in assets and liabilities and the impact of the decision on EPS, pre-tax income, assets and liabilities when most conservative choice is considered.
b.
To determine
The percentage change in assets and liabilities and the impact of the decision on EPS, pre-tax income, assets and liabilities when least conservative choice is considered.
c.
To determine
The impact on the current ratios by both the conservative decision.
d.
To determine
To explain: Whether the management of LTC will care very much about the choices related to the adjustments.
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Ch: Analyzing Financial Statements
The current year financial statement for sand and Juffair companies are presented below.
Balance sheet at 31 Dec 2019
Item
Cash
Account receivable (net)
Inventory
Property & equipment (net)
Other assets
Total assets
Current liabilities
Long-term debt (interest rate: 10%)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
Total liabilities and stockholders' equity
Income statement at 31 Dec 2019
item
Sales revenue (1/3 on credit)
(-) Cost of goods sold
(-) Operating expenses
Net income
Other data
item
Per share stock price at end of current year
Average income tax rate
Dividends declared and paid in current year
Sand
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45000
95000
160000
90000
435000
95000
75000
155000
40000
70000
435000
Sand
440000
230000
159000
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Sand
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Juffair
22000
35000
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Both companies are in the fish catching and…
The current asset section of the Excalibur Tire Company’s balance sheet consists of cash, marketable securities, accounts receivable, and inventory. The December 31, 2021, balance sheet revealed the following:
Inventory
$
840,000
Total assets
$
2,800,000
Current ratio
2.25
Acid-test ratio
1.2
Debt to equity ratio
1.8
Required:Determine the following 2021 balance sheet items:
1.Current assets
2.Shareholders' equity
3.Long-term assets
4.Long-term liabilities
Liberty Corporation reported the following financial statements:
Liberty’s rate of return on common stockholders’ equity can be described as
a. weak.
b. normal.
c. strong.
d. average
Chapter 20 Solutions
INTERMEDIATE ACCOUNTING-MYLAB W/ETEXT
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