Question

AutoSave Off HD Unit 1 Project Fall 2020 (2) - Protected View - Excel guada gucci GG File Home Insert Draw Page Layout Formulas Data Review View Help O Search Share Comments i PROTECTED VIEW Be careful—files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing X H16 fox 1 J к L N O P P Q R S т U A B с D E F G H 1 ACCT 2023 PROJECT 1 2 Amazing Company began operations on January 1, 2015, and is now in its fourth year of operations. It is a retail sales company with a large amount of online sales. 3 The adjusted trial balance as of December 31, 2019 appears below, along with prior year balance sheet data and some additional transaction data for 2018. 4 5 AMAZING COMPANY 6 Adjusted Trial Balance 7 12/31/2019 8 2019 2018 9 Account Title Adjusted Trial Balance ost-Closing Trial Balanc 10 Debit Credit Debit Credit 11 Cash 120.000 125,600 12 Accounts Receivable 55,000 35,000 13 Prepaid Insurance 5,000 6,000 14 Inventory 36,000 15,600 15 Office Equipment 53,000 47,000 16 Machinery & Tools 59,000 21,000 17 Accumulated Depreciation $ 24,000 16,000 18 Accounts Payable 12,200 16,800 19 Salaries Payable 2,600 2,700 20 Sales Tax Payable 2,000 4,000 21 Note Payable-Long Term 23,000 12,100 22 Common Stook, $10 par 240,000 160,000 23 Retained Earnings 38,600 38,600 24 Dividends 10,000 25 Sales Revenue 240,000 26 Cost of Goods Sold 142.600 27 Rent Expense 20,000 28 Salaries Expense 48,000 29 Insurance Expense 11,800 30 Legal Fees 9.200 31 Depreciation Expense 8,000 32 Interest Expense 1,800 33 Income Tax Expense 3,000 34 $ 582,400 $ 582,400 $250,200 250 200 35 36 37 Transaction Data for 2018 (Note, these transactions were included in the trial balance numbers above.) Instructions Stmt of Cash Flows Income Statement Balance Sheet Analysis Stock Investment Analysis + Ready + 70% Type here to search PI ER hulu х w 9:36 PM 9/17/2020

Answer 1

Amazing Company

Income Statement

Particulars	2019	2019	Remarks	Vertical Analysis	Remarks
Sales revenue	240,000		(a)	100.00%	(a/a)
Less: Cost of goods sold	(142,600)		(b)	59.42%	(b/a)
Gross profit		97,400	(c=a+b)	40.58%	(c/a)
Administrative expenses
Rent expense	20,000		(d)	8.33%	(d/a)
Salaries expense	48,000		(e)	20.00%	(e/a)
Insurance expense	11,800		(f)	4.92%	(f/a)
Legal expense	9,200		(g)	3.83%	(g/a)
Depreciation expense	8,000		(h)	3.33%	(h/a)
Total operating expense		97,000	(i=d+e+f+g+h)	40.42%	(i/a)
Operating income		400	(j=c-i)	0.17%	(j/a)
Interest expense	1,800		(k)	0.75%	(k/a)
Total non operating expense		1,800	(l)	0.75%	(l/a)
Profit before tax		(1,400)	(m=j-l)	-0.58%	(m/a)
Income tax expense		(3,000)	(n)	-1.25%	(n/a)
Profit after tax		(4,400)	(o=m+n)	-1.83%	(o/a)
EPS		(0.18)	p=o/24000	0.00%	(p/a)

Common stock	240,000
Par value	$10
Number of Common stock	24,000	(240000/10)

Amazing Company

Balance Statement

Particulars	2019	Remarks	Vertical Analysis	Remarks
Non Current asset
Property, plant and equipment	88,000	(i) Note 1	28.95%	(i/viii)
Total non current assets	88,000	(ii)	28.95%	(ii/viii)
Current asset
Inventory	36,000	(iii)	11.84%	(iii/viii)
Accounts receivable	55,000	(iv)	18.09%	(iv/viii)
Cash	120,000	(v)	39.47%	(v/viii)
Prepaid insurance	5,000	(vi)	1.64%	(vi/viii)
Total current assets	216,000	(vii)	71.05%	(vii/viii)
Total assets	304,000	(viii)	100.00%	(viii/viii)
Equity
Common Stock	240,000	(ix)	78.95%	(ix/viii)
Retained earnings	24,200	(x) Note 2	7.96%	(x/viii)
Total equity	264,200	(xi)	86.91%	(xi/viii)
Non Current liability
Note payable	23,000	(xii)	7.57%	(xii/viii)
Total non current liability	23,000	(xiii)	7.57%	(xiii/viii)
Current liability
Accounts payable	12,200	(xiv)	4.01%	(xiv/viii)
Salaries payable	2,600	(xv)	0.86%	(xv/viii)
Sales tax payable	2,000	(xvi)	0.66%	(xvi/viii)
Total current liability	16,800	(xvii)	5.53%	(xvii/viii)
Total liability	39,800	(xviii)	13.09%	(xviii/viii)
Total equity and liability	304,000	(xix)	100.00%	(xix/viii)

Note 1

Property, plant and equipment	2019	2018
Office Equipment	53,000	47,000
Machinery & Tools	59,000	21,000
Accumulated depreciation	(24,000)	(16,000)
	88,000	52,000

Note 2

Retained earnings	2019	2018
Retained earnings	38,600	38,600
Dividends	(10,000)
Profit after tax for the year	(4,400)
	24,200	38,600

Amazing Company

Cash flow Statement

Particulars	2019	2019	Remarks
Cash flows from operating activities
Profit before tax		(1,400)
Add: Interest expense	1,800
Add: Depreciation expense	8,000	9,800
(Increase)decrease in current assets
Inventory	(20,400)		(15600-36000)
Accounts receivable	(20,000)		(-55000+35000)
Prepaid insurance	1,000	(39,400)	(-5000+6000)
Increase(decrease) in current liabilites
Accounts payable	(4,600)		(12200-16800)
Salaries payable	(100)		(2600-2700)
Sales tax payable	(2,000)	(6,700)	(2000-4000)
Income tax paid		(3,000)
Cash flows from operating activities		(40,700)	(a)
Cash flows from investing activities
Cash paid for purchase of office equipment	(6,000)
Cash paid for purchase of tools	(15,000)
		(21,000)	(b)
Cash flows from financing activities
Issue of common stock	80,000
Note payable paid	(12,100)
Dividend paid	(10,000)
Interest paid	(1,800)	56,100	(c)
Net increase in cash and cash equivalents		(5,600)	d=(a+b+c)
Cash and cash equivalents at beginning of period		125,600	e
Cash and cash equivalents at end of period		120,000	f=d+e

Analysis of financial statement

Current ratio = current asset/current liabilities	12.86	(vii/xvii)
Working capital= current asset-current liabilities	$199,200	(vii-xvii)
Cash ratio=cash and cash equivalent/current liabilities	7.14	(v/xvii)
Debt equity ratio=Debt/Shareholder's equity	0.09	(xii/xi)
Inventory turnover ratio= (cost of goods sold/average inventory)	5.53	-b/((36000+15600)/2)
Days sales in inventory=(1/Inventory turnover ratio)*365	66.04
Gross profit percentage = gross profit/sales	0.41	(c/a)
Accounts receivable turnover ratio= net credit sales/Average accounts receivable	5.33	(assuming entire sales is on credit) (a/((55000+35000)/2))
Days sales in receivable = (1/Accounts receivable turnover ratio)*365	68.44
Rate of return on total assets=profit after tax/average assets	(0.02)	o/((250200+304000)/2)
Assets turnover ratio= (1/Rate of return on total assets)*365	(22,987)
Rate of return on shareholder's equity=profit after tax/average equity	(0.02)	o/((160000+38600+264200)/2)
Earnings per share	(0.18)	(p)
Price/earnings ratio=market value per share/earnings per share	(54.55)	(10//earnings per share)
Dividend yield = annual dividend/price per share	(0.04)	(10000/24000)/10
Dividend payout	(2.27)	(10000/o)