Financial Accounting, 8th Edition
8th Edition
ISBN: 9780078025556
Author: Robert Libby, Patricia Libby, Daniel Short
Publisher: McGraw-Hill Education
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Chapter 3, Problem 3AP
1.
To determine
Indicate the effect of each transaction of Company BN.
2.
To determine
Identify the manner in which the transactions are reported in the statement of
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Required information
[The following information applies to the questions displayed below.]
Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the
year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all
purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other
Expenses are paid in advance and are initially debited to Prepaid Expenses.
FORTEN COMPANY
Comparative Balance Sheets
December 31
Current Year
Prior Year
Assets
$ 69,400
85,400
295,156
1,340
$ 86,500
63,625
264,800
2,155
Cash
Accounts receivable
Inventory
Prepaid expenses
Total current assets
Equipment
Accum. depreciation-Equipment
417,080
121,000
(52,500)
451,296
144,500
(43,125)
Total assets
$552,671
$485,580
Liabilities and Equity
Accounts payable
Short-term notes payable
$ 66,141
13,900
80,041
58,500
$134,175
8,600
Total current…
Chapter 3 Solutions
Financial Accounting, 8th Edition
Ch. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Write the income statement equation and define...Ch. 3 - Explain the difference between a. Revenues and...Ch. 3 - Define accrual accounting and contrast it with...Ch. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following matrix by entering either...
Ch. 3 - Complete the following matrix by entering either...Ch. 3 - Prob. 12QCh. 3 - State the equation for the net profit margin ratio...Ch. 3 - Which of the following is not a specific account...Ch. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Prob. 10MCQCh. 3 - Prob. 1MECh. 3 - Reporting Cash Basis versus Accrual Basis Income...Ch. 3 - Prob. 3MECh. 3 - Prob. 4MECh. 3 - Prob. 5MECh. 3 - Prob. 6MECh. 3 - Prob. 7MECh. 3 - Prob. 8MECh. 3 - Prob. 9MECh. 3 - Prob. 10MECh. 3 - Prob. 11MECh. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Determining Financial Statement Effects of Various...Ch. 3 - Prob. 7ECh. 3 - Prob. 8ECh. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 16ECh. 3 - Prob. 17ECh. 3 - Prob. 18ECh. 3 - Prob. 1PCh. 3 - Recording Journal Entries (AP3-2) Ryan Terlecki...Ch. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Prob. 4APCh. 3 - Prob. 5APCh. 3 - Prob. 6APCh. 3 - Prob. 1CPCh. 3 - Prob. 2CPCh. 3 - Prob. 3CPCh. 3 - Prob. 4CPCh. 3 - Prob. 6CPCh. 3 - Evaluating an Ethical Dilemma Mike Lynch is the...Ch. 3 - Prob. 1CC
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- Need help with this problem please, will upvote!!arrow_forwardThe following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Use this information to answer the question that follow. Assets Cash and short-term investments $41,385 Accounts receivable (net) 27,338 Inventory 36,309 Property, plant, and equipment 206,732 Total assets $311,764 Liabilities and Stockholders' Equity Current liabilities $56,225 Long-term liabilities 90,205 Stockholders' equity—Common 165,334 Total liabilities and stockholders' equity $311,764 Income Statement Net Sales $82,724 Cost of goods sold (33,090) Gross margin 49,634 Operating expenses (29,417) Interest expense (4,136) Net income $16,081 Number of shares of common stock outstanding 6,061 Market price of common stock $25 Total dividends paid $9,700 Cash provided by operations $41,385 Using the data provided for…arrow_forwardForten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable. Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses). Loss on sale of equipment Income before…arrow_forward
- Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prlor Year Assets Cash $ 73,900 89,930 $ 89,500 66,625 Accounts receivable Inventory Prepaid expenses 299,656 267,800 1,370 2,215 Total current assets 464,856 426,140 Equipment Accum. depreciation-Equipment 124,000 (54,000) $ 496,140 141,500 (44,625) 561,731 Total assets 24 Liabilities and Equity Accounts payable Short-term notes payable 24 69,141 $ 138,675 14,800 9,200 Total current liabilities 83,941 57,000 147,875 64,750 Long-term notes payable Total liabilities 140,941 212,625…arrow_forwardPlease do not give solution in image format thankuarrow_forwardThe following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the question that follow. Assets Cash and short-term investments $39,569 Accounts receivable (net) 29,417 Merchandise inventory 30,907 Property, plant, and equipment 219,211 Total assets $319,104 Liabilities and Stockholders' Equity Current liabilities $66,051 Long-term liabilities 93,607 Stockholders' equity—common 159,446 Total liabilities and stockholders' equity $319,104 Income Statement Sales $93,952 Cost of merchandise sold (37,581) Gross profit $56,371 Operating expenses (26,268) Interest expense (4,698) Net income $25,405 Number of shares of common stock outstanding 6,014 Market price per share of common stock $31 Total dividends paid $8,800 Net cash flows from operating activities…arrow_forward
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- i need the answer quicklyarrow_forwardThe list of assets, equity and liability to be filled. Assets Amount (RO) Land and Building Plant and Equipment Furniture and Fitting Inventories Accounts and other receivables Cash Bank 43,789 11,571 11,571 Interest Expenses Taxes 35,097 62,796 40,875 160,531 Equity & Liabilities Equity Share Capital Bonds Payable Accounts Payable Outstanding Expenses Short Term Bank Borrowing The list of Income Statement items is given below. Sales Cost of goods sold General and Administrative Expenses Selling and Marketing Expenses Depreciation Expenses Amount (RO) 165,588 87028 18,469 18,861 6,144 Amount (RO) 78,560 5,591 Additional Information: 1. Dividend paid by the company in the year 2022 is RO 30,277 2. The face value of each share is RO 0.196 3. The market price of shares at end 2022 is Ro 318,685,485.58 162,59 5 34,465 10,58 0 183,36 3 54578 You are required to calculate - Earnings per share, Interest cover, Dividend cover, Price/Earnings ratio, Gross Profit Margin Ratio, Operating profit…arrow_forward[The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANYIncome StatementFor Current Year Ended December 31 Sales $ 597,500 Cost of goods sold 288,000 Gross profit 309,500 Operating expenses (excluding depreciation) $ 135,400 Depreciation expense 23,750 159,150 Other gains (losses) Loss on sale of equipment (8,125 ) Income before taxes 142,225 Income taxes expense 28,450 Net income $ 113,775 FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year…arrow_forward
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