Concept explainers
a.
Introduction:
Assets are the resources of the business which the business owns. Liabilities are the obligations of the business which business has to pay in future. Equity means funds of the shareholders or the total amount which shareholders own.
To calculate: The amount of equity at the year-end.
b.
Introduction:
Assets are the resources of the business which the business owns. Liabilities are the obligations of the business which business has to pay in future. Equity means funds of the shareholders or the total amount which shareholders own.
To calculate: The amount of equity at the year-end.
c.
Introduction:
Assets are the resources of the business which the business owns. Liabilities are the obligations of the business which business has to pay in future. Equity means funds of the shareholders or the total amount which shareholders own.
To calculate: The amount of beginning and ending equity.
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FINANCIAL ACCT.FUND.(LOOSELEAF)
- Grammatico Company has just completed its third year of operations. The income statement is as follows: Selected information from the balance sheet is as follows: Required: Note: Round answers to two decimal places. 1. Compute the times-interest-earned ratio. 2. Compute the debt ratio. 3. CONCEPTUAL CONNECTION Assume that the lower quartile, median, and upper quartile values for debt and times-interest-earned ratios in Grammaticos industry are as follows: How does Grammatico compare with the industrial norms? Does it have too much debt?arrow_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_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
- Examine the following income statement: Approximately how much does the outstanding debt cost shareholders every year? a. $50 b. $33 c. $88arrow_forwardThe comparative accounts payable and long-term debt balances for a company follow. Line Item Description Current Year Previous Year Accounts payable $116,280 $102,000 Long-term debt 129,600 120,000 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Enter all answers as positive numbers.arrow_forwardThe balance sheets of HR, Inc. reports total stockholders' equity of $500,000 and $650,000 at the beginning and end of the year, respectively. The return on equity for the year is 20%. What is HR's net income for the year? Select one: a. $2,875,000 b. $250,000 c. $130,000 d. $115,000 e. $100,000arrow_forward
- Calculate the following financial ratios for Phone Corporation: (Use 365 daysin a year. Do not round intermediate calculations. Round your finalanswers to 2 decimal places.)1. Return on Assets (use average balance sheet figures)2. Return on capital (use average balance sheet figures) %3. Days in inventory (use start of year balance sheet figures) %4. Inventory turnover (use start of year balance sheet figures5. Average collection period (use start of year balance sheet figures)6. Operating profit margin %7. Long term debt ratio (use end of year balance sheet figures)8. Total Debt ratio (use end of year balance sheet figures)arrow_forwardThe balance sheet of HR, Inc. reports total equity of $900,000 and $1,100,000 at the beginning and end of the year, respectively. The return on equity for the year is 20%. What is HR's net income for the year? Select one: a. $200,000 b. $180,000 c. $198,000 d. $162,000 e. $220,000 Clear my choicearrow_forwardRequired: Complete the following calculations for each individual company: a. If ColourMePink Ltd. has a retained earnings opening balance of $50,000 at the beginning of the year, and an ending balance of $40,000 at the end of the year, what would be the net income/loss, if dividends paid were $20,000? b. If ForksAndSpoons Ltd. has net income of $150,000, dividends paid of $40,000 and a re- tained earnings ending balance of $130,000, what would be the retained earnings opening balance? c. If CupsAndSaucers Ltd. has a retained earnings opening balance of $75,000 at the beginning of the year, and an ending balance of $40,000 at the end of the year, what would be the dividends paid, if the net loss was $35,000?arrow_forward
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