+1-415-670-9189
info@expertsmind.com
Integrating case 5-23 balance sheet
Course:- Accounting Basics
Reference No.:- EM13149095




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

integrating Case 5-23
Balance Sheet

Assets
Cash $ 15,000
Accounts receivable (net) (e)
Inventory (d)
Prepaid expenses and other current assets (i)
Current assets (h)
Property, plant, and equipment (net) (j)
$ (b)
Liabilities and Shareholders' Equity
Accounts payable $ (g)
Short-term notes 5,000
Current liabilities (f)
Bonds payable (l)
Shareholders' equity (k)
$ (b)
Income Statement
Sales (a)
Cost of goods sold (c)
Gross profit (c)
Operating expenses (o)
Interest expense (m)
Tax expense (n)
Net income mce_markernbsp;
Case 5-23 (concluded)

Calculations ($ in 000s):
a. Profit margin on sales = Net income ÷ Sales = 5% 
For example:
Net income = 17000
17000/X = .05
Cross multiply
17000
_____ =.05
X
17000 = .05X
Divide both sides by .05
X = 17000/.05
X = 340,000

b. Return on assets = Net income ÷ Total assets = 7.5%
For example:
Net income = 17000
17000/X = .075
Cross multiply
17000 = .075X
Divide both sides by .075
X = 17000/.075
X = 226,666




c. Gross profit margin = Gross profit ÷ Sales = 40%
Cost of goods sold = Sales - Gross profit =
d. Inventory turnover ratio = Cost of goods sold ÷ Inventory = 6

e. Receivables turnover ratio = Sales ÷ Accounts receivable = 25
f. Acid-test ratio = Cash + AR + ST Investments ÷ Current liabilities = .9
g. Accounts payable = Current liabilities - Short-term notes = $
h. Current ratio = Current assets ÷ Current liabilities = 2

i. Prepaid expenses and other current assets = 
Current assets - (Cash + AR + Inventory) = $
j. Property, plant, and equipment = Total assets - Current assets = 
k. Return on shareholders' equity = Net income ÷ Shareholders' equity =10%

l. Debt to equity ratio = Total liabilities ÷ Shareholders' equity = 
Bonds payable = Total liabilities - Current liabilities = 
m. Interest expense = 8% x (Short-term notes + Bonds )
Interest expense = 
n Times interest earned ratio = (Net income + Interest +Taxes) ÷ Interest = 12
Times interest earned ratio = 
Times interest earned ratio = 
Tax expense = mce_markernbsp;
o. Operating expenses = (Sales - Cost of goods sold - Interest expense - Tax expense) - Net income = 

Case 5-23                        

               Net income     16000

               Short term note           5000

               Bonds interest rate    0.08

               Cash balance  15000

               Profit margin on sales             0.05

               Return on assets         0.075

               Gross profit margin   0.4

               Inventory turnover ratio       6

               Receivables turnover ratio   25

               Acid test ratio               0.9

               Current ratio  2

               Return on shareholders equity          0.1

               Debt to equity ratio   0.33

               Times interest earned             12

 

Integrating Case 5-23

   Balance Sheet

        

    Assets        

    Cash        $  15,000
       Accounts receivable (net)                   (e)
       Inventory              (d)
       Prepaid expenses and other current assets               (i)
         
Current assets              (h)
       Property, plant, and equipment (net)             (j)
                $        (b)
          Liabilities and Shareholders’ Equity
       Accounts payable $        (g)
       Short-term notes        5,000     
         
Current liabilities                  (f)
       Bonds payable                (l)
       Shareholders’ equity                 (k)
                $        (b)

   Income Statement

   Sales                  (a)
      Cost of goods sold           (c)
         Gross profit                  (c)
      Operating expenses                    (o)
      Interest expense               (m)
      Tax expense           (n)
            Net income $       

Case 5-23 (concluded)

 

Calculations ($ in 000s):

a.  Profit margin on sales = Net income ÷ Sales = 5%     

     For example:

     Net income = 17000

     17000/X = .05

     Cross multiply

17000

_____    =.05

X

17000 = .05X

Divide both sides by .05

X = 17000/.05

X = 340,000

                                                                                       

b.  Return on assets = Net income ÷ Total assets = 7.5%

     For example:

     Net income = 17000

     17000/X = .075

     Cross multiply

     17000 = .075X

     Divide both sides by .075

     X = 17000/.075

     X = 226,666

 

 

    

c.  Gross profit margin = Gross profit ÷ Sales = 40%         
Cost of goods sold = Sales – Gross profit =              

d.  Inventory turnover ratio = Cost of goods sold ÷ Inventory = 6

e.  Receivables turnover ratio = Sales ÷ Accounts receivable = 25                    

f.   Acid-test ratio = Cash + AR + ST Investments ÷ Current liabilities = .9                                                                           

g.  Accounts payable = Current liabilities – Short-term notes = $

h.  Current ratio = Current assets ÷ Current liabilities = 2    

i.   Prepaid expenses and other current assets =              
Current assets – (Cash + AR + Inventory) = $

j.   Property, plant, and equipment = Total assets – Current assets =

k.  Return on shareholders’ equity = Net income ÷ Shareholders’ equity =10%

l.   Debt to equity ratio = Total liabilities ÷ Shareholders’ equity =                    
Bonds payable = Total liabilities – Current liabilities =

m. Interest expense = 8% x (Short-term notes + Bonds )
Interest expense =

n   Times interest earned ratio = (Net income + Interest +Taxes) ÷ Interest = 12
Times interest earned ratio =                                     
Times interest earned ratio =                                     
Tax expense = $

o.           Operating expenses = (Sales – Cost of goods sold – Interest expense – Tax expense) – Net income =

 

 

 




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Samantha's Design Studio showed office supplies available of $700. A count of the supplies left on hand as of June 30 was $400. The adjusting journal entry is:
Research Web sites that contain examples of stock dividends, stock splits, and reverse splits. Yahoo! Finance at http://finance.yahoo.com is a helpful starting point for loc
Roth Inc. has a deferred tax liability of $68,000 at the beginning of 2011. At the end of 2011, it reports accounts receivable on the books at $90,000 and the tax basis at zer
Why should the accounting for the lessor be different depending on whether the residual value is guaranteed or unguaranteed? Couldn't they just "adjust" the depreciation exp
Hollis Stacy wants to create a fund today that will enable her to withdraw $20,000 per year for 8 years, with the first withdrawal to take place 5 years from today. If the fun
If your savings account earn an annual rate of 5.5% compounded weekly, how much did you deposit 10 years ago if your account's present balance is $125,000? a. $72,139.69 b. $8
How exactly does international tax planning assist a US citizen avoid taxes? Discuss what you feel are the legal, ethical and fairness issues involved in doing this type of in
Recovery of working capital will be $10,000 at the end of its useful life. Annual cash savings from the purchase of the machine will be $20,000.