Concept explainers
a)
Statement of owners’ equity:
This statement reports the final balance of owner’s equity for a particular period of time, after certain adjustments like additional capital, net income from income statement and drawings. This statement is prepared after the income statement.
Balance sheet:
This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (stockholders’ equity) over those resources. The resources of the company are assets which include money contributed by stockholders and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and
To prepare: Statement of owner's equity of Company UP for the month ended April 30, 2016.
b)
To explain: the reason for preparing the statement of owner's equity before preparing the balance sheet.
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Accounting (Text Only)
- Preparing a corporate income statement ABC Corporation's accounting records include the following items, listed in no particular order, at December 31, 2018: The income tax rate for ABC Corporation is 39%. Prepare ABC’s income statement for the year ended December 31, 2018. Omit earnings per share. Use the multi-step format.arrow_forwardThe following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2019: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of owners equity. 3. Prepare a balance sheet, assuming that the current portion of the note payable is 50,000. 4. Briefly explain how multiple-step and single-step income statements differ.arrow_forwardIncome Statement, Statement of Retained Earnings, and Balance Sheet The following list, in alphabetical order, shows the various items that regularly appear on the financial statements of Sterns Audio Book Rental Corp. The amounts shown for balance sheet items are balances as of December 31, 2016 (with the exception of retained earnings, which is the balance on January 1, 2016), and the amounts shown for income statement items are balances for the year ended December 31, 2016. Required Prepare an income statement for the year ended December 31, 2016. Prepare a statement of retained earnings for the year ended December 31, 2016. Prepare a balance sheet at December 31, 2016. You have $1,000 to invest. On the basis of the statements you prepared, would you use it to buy stock in this company? Explain. What other information would you want before deciding?arrow_forward
- Personal hotspot.. Used 72.4 MB Prepare the required financial statements for Metro Company Assume you are an analyst evaluating Metro Company. The following data are available in your financial analysis (unless otherwise indicated, all data are as of December 31, 2015): - 50 points Retained earnings, 12/31/2014 Gross profit margin ratio Day's sales in inventory Acid-test ratio Non current assets Day's sales in receivables Shareholder's equity to total debt Sales (all on credit) Common stock $15 par value; 10,000 shares issued and outstanding; issued at $21 per share. $98,000 25% 45 days 2.5 times $280,000 18 days 4 to 1 $920,000 Using these data, construct the December 31, 2015 balance sheet for your analysis. Operating expenses (excluding taxes and cost of goods sold for 2015) are $180,000. The tax rate is 40%. Assume a 360-day year in ratio computations. Current assets consist of cash, accounts receivable, and inventories. Your answer -> 41 •.. Honor Code | bart.. Lite…arrow_forwardOn April 1, 2018, Poppy Company invests $16,000 in Fruits, Inc. stock. Fruits pays Poppy a $700 dividend on August 1, 2018. Poppy sells the Fruits's stock on August 31, 2018, for $16,150. Assume the investment is categorized as a short-term equity investment and Poppy Company does not have significant influence over Fruits, Inc. Read the requirements. Requirerlent 1. Journalize the transactions for Poppy's investment in Fruits' stock. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing Poppy's initial investment in Fruits, Inc., stock. Date Accounts and Explanation Debit Credit Apr. 1 O Time Course Chat GBarrow_forwardPresented below is information related to Cullumber Company as of and for the year ended December 31, 2017. This was Cullumber Company's first year of operations. (Ignore income tax effects.) Sales revenue $ 1,350,000 Cost of goods sold 630,000 Selling and administrative expenses 380,000 Loss on sale of plant assets 82,000 Unrealized gain on available-for-sale investments 12,000 Interest expense 5,200 Interest revenue 3,500 Loss on discontinued operations 2,800 Allocation to noncontrolling interest 9,400 Dividends de red and paid 27,100arrow_forward
- 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 45000 45000 95000 160000 90000 435000 95000 75000 155000 40000 70000 435000 Sand 440000 230000 159000 51000 Sand 23 30% 34000 Juffair 22000 35000 45000 415000 320000 837000 65000 65000 522000 110000 75000 837000 Juffair 800000 399000 315000 86000 Juffair 25 30% 153000 Both companies are in the fish catching and…arrow_forwardNeed asap please and thank you. Cullumber Company provides you with the following balance sheet information as of December 31, 2017. Current assets $14,720 Current liabilities $15,360 Long-term assets 32,860 Long-term liabilities 16,860 Total assets $47,580 Stockholders’ equity 15,360 Total liabilities and stockholders’ equity $47,580 In addition, Cullumber reported net income for 2017 of $20,480, income tax expense of $3,904, and interest expense of $1,664. Compute the current ratio and working capital for Cullumber for 2017. (Round current ratio to 2 decimal places, e.g. 2.75. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Current ratio enter current ratio rounded to 2 decimal places :1 Working capital $enter a dollar amountarrow_forwardQuestion 2Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: a. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)arrow_forward
- Company E reports net income of $100,000 for 2015. Assume the income is earned evenly throughout the year. Dividends of $10,000 are paid on December 31. What will Company R report as investment income under the following ownership situations, if: a. Company R owns a 10% interest from July 1 to December 31? b. Company R owns a 10% interest from January 1 to June 30 and a 25% interest from July 1 to December 31? c. Company R owns a 30% interest from January 1 to June 30 and a 10% interest from July 1 to December 31?arrow_forwardExamine the following selected financial information for Best Value Corporation and Modern Stores, Inc., as of the end of their fiscal years ending in 2018: Data table (In millions) Best Value Corporation Modern Stores, Inc. 1. Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . $15,256 $203,110 2. Total common stockholders' equity. . . . . $3,075 $71,460 3. Operating income. . . . . . . . . . . . . . . . . . . . $1,350 $26,820 4. Interest expense. . . . . . . . . . . . . . . . . . . . . . $88 $2,020 5. Leverage ratio. . . . . . . . . . . . . . . . . . . . . . . . 6. Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Debt ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Times interest earned. . . . . . . . . . . . . . . . . Requirements…arrow_forwardUse the following selected financial information for Cascabel Corporation to answer questions Cascabel Corporation Balance Sheet December 31, 2015 Assets Liabilities and stockholders' equity Current assets Current liabilities Cash Accounts payable Accrued liabilities 2 36 Short-term investments 10 25 Accounts receivable 52 Total current liabilities 61 Inventory 57 Other current assets Long-term debt 102 Total current assets 129 Total liabilities 163 Long-term assets Stockholders' equity Net Plant 195 Common stock 110 Retained earnings Total stockholders' equity Total liabilities and equity 51 161 324 Total assets 324 Cascabel Corporation Income Statement For the Year Ended December 31, 2015arrow_forward
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