Income Statement:
It is a financial statement which show the
Statement of
It is a financial statement which shows the amount of profit retained by the company for their future unforeseen events.
The balance sheet concludes the assets invested in by the company as well as reports the liabilities and equity taken up thus showing the economic or financial status of the company.
Closing entries:
These entries is made for those item whose balance need to be zero for next accounting period otherwise data of two accounting periods will get mix with each other and we only want to see the data of one accounting period in it.
Return on asset:
It tells us about how much company is earning from total amount of asset it has. It is determined by dividing net income from total average assets in percentage terms.
Debt ratio:
It shows how much of the company’s assets are bought using debt capital. Higher the debt ratio higher the financial risk, lower the debt ratio lower the financial risk. it comes after dividing debt capital by total assets.
Profit margin ratio:
It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.
It shows whether company will be able to pay their current liabilities out of their current asset or not. It comes after dividing current liabilities from current assets.
1.
To prepare: Income statement, statement of retained earnings and classified balance sheet.
2.
To prepare:
3.
a.
Return on assets ratio.
b.
Debt ratio.
c.
Profit margin ratio.
d.
Current ratio.
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Chapter 3 Solutions
FINANCIAL & MANAGERIAL ACCT. CONNECT
- Wilson Corporation acquires Greatbatch Company for $80 million cash in a merger. The balance sheets of both companies at the date of acquisition are as follows: Balance Sheet (in millions) Wilson Greatbatch Current assets $96 $8 Property and equipment 800 144 Intangibles 32 4.8 Total assets $928 $156.8 Current liabilities $40 $3.2 Long-term debt 640 104 Capital stock 80 19.2 Retained earnings 192 24 Accumulated other comprehensive income (loss) (24) 6.4 Total liabilities and equity $928 $156.8 Greatbatch's property and equipment is overvalued by $48 million, its reported intangibles are undervalued by $32 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $11.2 million. Required Prepare Wilson's balance sheet immediately following the merger. Use a negative sign with your answer for AOCI if the balance is a loss.arrow_forwardNot use ai solution given correct answerarrow_forwardGeneral Accounting questionarrow_forward
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