Questions On Accounting

Submitted By aburgart
Words: 614
Pages: 3
Open Document
Amanda Burgart
Chapters 3 & 4 Homework
2/20/12
E3.6. | | a. | ROI = ($83,700 Net income / $2,790,000 Sales) x (2,790,000 Sales / 1,395,000 Average total assests) = 6.0% Turnover = (2,790,000 Sales / $1,395,000 Average total assets) Turnover = 2 Margin = ($83,700 Net income / $2,790,000 Sales) = 3.0% ROI = (3.0% Margin * 2 Turnover) = 6.0% | b. | 15% ROI = ($150,000 Net Income/ $2,500,000 Sales) x ($2,500,000 Sales / Average total assets) Average total assets = $1,000,000 Turnover = (2,500,000 Sales / $1,000,000 Average total assets) Turnover = 2.5 | | | | | | | c. | 12.6% ROI = (Margin * 1.4 Turnover) Margin = 9% 1.4 Turnover = (Sales / $1,730,159 Average total assets) Sales = $2,422,223 12.6% ROI = (Net Income / $1,730,159 Average total assets) Net Income = $13,731,421 |

P3.12. | | a. | ROI = (Net income / Average total assets) = ($34,000 / $312,000) = 10.90% | b. | ROE = (Net income / Average stockholders' equity) = ($34,000 / $196,000) = 17.4% | c. | Working capital = Current assets - Current liabilities 12/31/11 12/31/10 Current assets $202,000 $190,000 - Current liabilities 94,000 83,000 = Working capital $108,000 $107,000 | P3.12. | (continued) | d. | Current ratio = Current assets / Current liabilities 12/31/11 12/31/10 Current assets ……… $202,000 $190,00 / Current liabilities ……… 94,000 83,000 = Current ratio ……… 2.15 2.29 | e. | Acidtest ratio = (Cash + Shortterm securities + Accounts and Notes receivable) Current liabilities 12/31/11 12/31/10 Cash and cash equivalents ……… $21,000 $19,000 Short-term investments 18,000 17,000 Trading assets ………65,000 60,000 Accounts receivable, net 78,000 72,000 Total (quick assets) ……… $182,000 $168,000 Total (quick assets) ………$182,000 $168,000 / Current liabilities 94,000 83,000 = Acidtest ratio 1.94 2.02 f. If Hames Inc. decided to pay $15,000 of account payable, then the calculations above would decrease the values. |

E4.2. | | | ASSETS = LIABILITIES
Show More

Related Documents: Questions On Accounting

Essay on Chapter 2 Study Guide

CHAPTER STUDY OBJECTIVES 1. Identify the sections of a classified balance sheet. In a classified balance sheet, companies classify assets as current assets; long-term investments; property, plant, and equipment; or intangibles. They classify liabilities as either current or long-term. A stockholders’ equity section shows common stock and retained earnings. 2. Identify and compute ratios for analyzing a company’s profitability. Profitability ratios, such as earnings per share (EPS), measure aspects…

Words 3348 - Pages 14

Chapter 2 Essays

FINANCIAL ACCOUNTING Tools for Business Decision-Making KIMMEL  WEYGANDT  KIESO  TRENHOLM  IRVINE CHAPTER 2: A FURTHER LOOK AT FINANCIAL STATEMENTS STUDY OBJECTIVES SO 1: Identify the sections of a classified statement of financial position. SO 2: Identify and calculate ratios for analyzing a company’s liquidity, solvency, and profitability. SO 3: Describe the framework for the preparation and presentation of financial statements. Classified Statement of Financial Position • A classified…

Words 1205 - Pages 5

ACCT 2301 Study Guide

Exam Chapter 1 Purpose and objectives of Generally Accepted Accounting Principles (GAAP). Purpose of financial reporting Purposes of and differences between financial accounting/management accounting/tax accounting Purposes/Authority of the Securities and Exchange Commission and the Financial Accounting Standards Board Chapter 2 3 primary/general purpose financial statements, nature of and reporting periods/dates covered by each. Nature of Assets, Liabilities, Equity, Revenue and Expenses…

Words 673 - Pages 3

Essay on Disclosure: Summary of notes

Significant Accounting Policies Company Throughout this document Green Dog Product INC. is referred to as we or the Company. We are an organic dog food retailer situated in San Francisco. These products are sold in the company's own retail outlets along with other partnered retailers. The Company was established by Patricia Hopland in 1982 and became public in 1994. Accounting Principles The financial statements and the accompanying notes are prepared in accordance with accounting principles generally…

Words 506 - Pages 3

Financial Statement Analysis Dean Food Financial Essay

for Dean Food Financial Liquidity Ratio Formula 2012 2011 2010 Current Ratio Current assets / Current Liabilities 1.07 0.98 1.23 Efficiency Ratios Total Asset Turnover Net Sales / Average Total Assets 2.00 1.90 N/A Fixed Asset Turnover Net Sales / Average Fixed Assets 5.75 6.18 N/A Working Capital Turnover Net Sales / Average Working Capital 32.09 -126.26 8.08 Leverage Ratios Debt to equity Total Liabilities / Shareholders Equity 14.92 -56.65 4.31 Times Interest Earned Income before…

Words 823 - Pages 4

Quiz 2 Possible Questions Ch 2 and 6 Essay examples

shown below the net income. Inventory — Under IFRS, LIFO cannot be used, but GAAP, companies have the choice between LIFO and FIFO. Earning-per-Share — Under IFRS, the earning-per-share calculation does not average the individual interim period calculations, whereas under GAAP the computation averages the individual interim period incremental shares. Development costs — These costs can be capitalized under IFRS if certain criteria are met, while it is considered as "expenses" under U.S. GAAP. 5. What…

Words 1084 - Pages 5

finance report 16 26 Essay

2012 and 2011 the inventory reserves were increase 3.1M and total average inventory increase 698.2 so the inventory turnover ratio decrease. P19 Depreciation Method Fixed asset: generally ranging of useful live from 2 to 15 years for equipment and 30 to 40 years for buildings Method: Straight-line method Fixed asset: generally 10 years. The shorter of estimated useful lives or the related lease life Method: Leasehold improvement Fixed asset: Original lease term to determine estimated useful lives…

Words 1009 - Pages 5

accounting review Essay

C1 accounting: Produces financial statements for measuring firm performance. Financial accounting: Provides information for external users: Investors, Creditors, Government, The public. Includes: Financial statements. Managerial a: Provides information for internal users: Managers. Includes: Budgets, Forecasts. Business types: proprietorship(proprietor-one, himself liable for company), partnership(partners-two or more, partners are liable), LLC(members, members are not personally liable. No need…

Words 1956 - Pages 8

Summary Of Accounting Terms Accountant

Summary of Accounting Terms Accountant – an individual who uses the data for interpretation of their effects to the business. Accounting – a systematic follow-through in documenting financial transactions of business properties and obligations. Accounting - the process of measuring and recording the financial information of assets and liabilities of a business. Accounting concepts – known as the building blocks of GAAP that are broken into assumptions, principles, and conventions. Accounting Cycle –…

Words 2927 - Pages 12

Identify And Compute Ratios For Analyzing A Company's Profitability

statement and a statement of stockholders’ equity. Identify and compute ratios for analyzing a company’s liquidity and solvency using a balance sheet. Use the statement of cash flows to evaluate solvency. Explain the meaning of generally accepted accounting principles. Discuss financial reporting concepts. 4. 5. 6. 7. Summary of Questions by Study Objectives and Bloom’s Taxonomy Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT K C…

Words 8529 - Pages 35