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Concept Introduction:
Financial statements:
Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner's equity and
Balance Sheet:
The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities.
Basic Earnings per share:
The Basic Earnings per share is the amount of net income earned by each common share outstanding. The Earnings per share calculated by with help of following formula:
To Indicate:
The effect of record date of Dividend on Net Assets and Earnings per share
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Chapter 8 Solutions
Survey of Accounting (Accounting I)
- Ratio of liabilities to stockholders equity and times interest earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: The income before income tax expense was 480,000 and 420,000 for the current and previous years, respectively. A. Determine the ratio of liabilities to stockholders equity at the end of each year. Round to one decimal place. B. Determine the times interest earned ratio for both years. Round to one decimal place. C. What conclusions can be drawn from these data as to the companys ability to meet its currently maturing debts?arrow_forwardCash dividends of $88,319 were declared during the year. Cash dividends payable were $9,765 at the beginning of the year and $14,005 at the end of the year. The amount of cash for the payment of dividends during the year is Oa. $88,319 Ob. $102,324 Oc. $84,079 Od. $78,554arrow_forwardThe comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Please see the attachment for details: InstructionsDetermine the following measures for 20Y2, rounding to one decimal place including percentages, except for per-share amounts:1. Working capital2. Current ratio3. Quick ratio4. Accounts receivable turnover5. Number of days’ sales in receivables6. Inventory turnover7. Number of days’ sales in inventory8. Ratio of fixed assets to long-term liabilities9. Ratio of liabilities to stockholders’ equity10. Times interest earned11. Asset turnover12. Return on total assets13. Return on stockholders’ equity14. Return on common stockholders’ equity15. Earnings per share on common stock16. Price-earnings ratio17. Dividends per share of common stock18. Dividend yieldarrow_forward
- The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash Marketable securities Accounts and notes receivable (net) Inventories Prepaid expenses Total current assets Current liabilities: Accounts and notes payable (short-term) Accrued liabilities Total current liabilities. $620,500 718,500 294,000 749,800 386,200 $2,769,000 1. Working capital 2. Current ratio 3. Quick ratio b. The liquidity of Albertini has in current assets relative to current liabilities. $411,800 298,200 $710,000 $496,000 558,000 186,000 529,500 338,500 $2,108,000 $434,000 186,000 $620,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. Current Year Previous Year from the preceding year to the current year. The working capital, current ratio, and quick ratio have all Most of these changes are the result of anarrow_forwardJuroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: Note: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 2. Calculate the debt ratio. 3. Calculate the debt-to-equity ratio.arrow_forwardTRUE OR FALSE Earnings per share is found by taking the net income for the year divided by the number of common shares outstanding at the end of the year.arrow_forward
- Relationships Among the Financial Statements The following information for Kellman Inc. is available at the end of the year. Total assets on Jan. 1 $72,500 Total assets on Dec. 31 78,900 Total liabilities on Jan. 1 12,100 Total liabilities on Dec. 31 9,800 Common stock on Jan. 1 Common stock on Dec. 31 Net income for the year Required: Calculate the amount of dividends declared reported on the retained earnings statement. $50,000 50,000 14,400arrow_forwardThe denominator of Earnings per share computation includes the weighted average number of common shares outstanding. Give three explanations why use the weighted average instead of the year-end common shares outstanding.arrow_forwardVertical Analysis of Balance Sheet Balance sheet data for a company for the years ended December 31, 20Y2 and 20Y1, are shown below. 20Y2 20Υ1 Current assets $ 752,000 $ 602,000 Property, plant, and equipment 6,248,000 5,397,000 Intangible assets 1,000,000 1,001,000 Current liabilities 504,000 427,000 Long-term liabilities 1,504,000 1,197,000 Common stock 1,248,000 1,253,000 Retained earnings 4,744,000 4,123,000 | Prepare a comparative balance sheet for 20Y2 and 20Y1, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. Round your answers to one decimal place. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 Amount 20Y2 Percent 20Y1 Amount 20Y1 Percent Assets Current assets $752,000 % $602,000 % Property, plant, and equipment 6,248,000 5,397,000 Intangible assets 1,000,000 1,001,000arrow_forward
- The following information was available for the year ended December 31, 2022: Dividends per share Earnings per share 1.35 3.00 28.20 Market price per share at year-end Required: a. Calculate the price/earnings ratio for 2022. Note: Round your answer to 2 decimal places. b. Calculate the dividend payout ratio for 2022. Note: Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34). c. Calculate the dividend yield for 2022. Note: Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34). a. Price/Earning ratio b. Dividend payout ratio c. Dividend yield % Ji di %arrow_forwardRatio of liabilities to stockholders equity intrest earned The following data were taken from the financial statements of Hunters Inc.for December 31 of two recent years: The income before income tax was $480,000 and $420,000 for the current and previous years,respectively. a. Determine the ratio of liabilities to stockholders equity at the end of each year.Round to one decimal place. b. Determine the times interest earned ratio for both years.Round to one decimal place. c. What conclusion can be drawn from these data as the company's ability to meet its currently maturing debts?arrow_forwardPerform a vertical analysis for the balance sheet entry "Accounts Payable" given below (as a %). (Round your answer to one decimal place.)arrow_forward
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningCollege Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
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