Homework Answers
A)
Income Statement for the year ended 2018 and 2019
| 2018 | 2019 | |
| Revenues (A) | 164,000 | 183,000 |
| Expenses : | ||
| Rent Expense | 12,800 | 13,100 |
| Selling and admin expenses | 6,400 | 7,300 |
| Payroll expenses | 82,300 | 93,500 |
| Total Expenses (B) | 101,500 | 113,900 |
| Net income (C) = A - B | 62,500 | 69,100 |
Statement of Retained Earnings for the year ended 2018 and 2019
| 2018 | 2019 | |
| Retained Earnings Jan 1 | 164,200 | 221,900 |
| Add: Net income | 62,500 | 69,100 |
| Sub Total | 226,700 | 291,000 |
| Less: Dividend | 4,800 | 3,200 |
| Retained Earnings December 31 | 221,900 | 287,800 |
Balance Sheet at the end of 2018 and 2019
| 2018 | 2019 | |
| Assets : | ||
| Cash | 13,500 | 18,600 |
| Accounts Receivable | 1,600 | 2,800 |
| Property and equipment | 273,400 | 337,230 |
| Total Assets | 288,500 | 358,630 |
| Liabilities and shareholder's equity : | ||
| Accounts payable | 10,600 | 10,830 |
| Note payable | 16,000 | 20,000 |
| Total liabilities | 26,600 | 30,830 |
| Shareholder's equity | ||
| Common stock | 40,000 | 40,000 |
| Retained Earnings, December 31 | 221,900 | 287,800 |
| Total Shareholder's equity | 261,900 | 327,800 |
| Total liabilities and shareholder's equity | 288,500 | 358,630 |
B) Performance from the bank perspective :
Before sanctioning loans bank authority always checks the following ratios :
Debt to total assets ratio :
Debt to total assets ratio = Total debts / Total assets
2018 = 26,600 / 288,500 = 0.0922 or 9.22 %
2019 = 30,830 / 358,630 = 0.0860 or 8.60%
So, dependency on borrowed fund decreased, which is a good financial indicator .
Debt equity ratio = Total debts / Total Shareholder's equity
2018 = 26,600 / 261,900 = 0.1016 or 10.16 %
2019 = 30,830 / 327,800 = 0.0941 or 9.41 %
In capital structure , proportion of debt reduced and proportion of equity increased , which is favorable to get loan from bank.
Operating Profit ratio = [Operating income / net sales ] X 100 %
Here , there is no non operating income or expenses so, net income = net operating income.
2018 = [62,500 / 164,000] X 100 % = 38.11 %
2019 = [69,100/183,000] X 100% = 37.76 %
Operating profit ratio in both of the years are very good .In 2019 it has been decreased marginally ,which may not effect to obtain loan from the bank.
So, overall the performance of the company improved in 2019 which is favorable to obtain loan from the bank .
From the investor perspective :
Apart from the above ratios , Dividend pay out ratio is very important for them .
Dividend pay out ratio = dividend paid / net income
2018 = 4,800 / 62,500 = 0.0768 or 7.68 %
2019 = 3,200 / 69,100 = 0.0463 or 4.63%
Prospective investors will not been attracted if they need instant maximum return . So the performance is not good for attracting conservative investors but good for attracting adventurous investors , who can sacrifice today's share of profit for tomorrow's fortune .
If you understand the above solution then please give me a like .Your like is really important for me. Thank you
Add Answer to:
The Copeland Company was founded on January 1, 2017; since then, the company has been fairly...
The Copeland Company was founded on January 1, 2017; since then, the company has been fairly...
The Copeland Company was founded on January 1, 2017; since then, the company has been fairly successful; however, in an effort to save some money, the president has been keeping track of the financial records rather than hiring a professional accountant. Although some data is missing, a comparative report of year-end account balances appears below; all numbers are as of December 31st unless noted otherwise. Rent expense Selling and admin. expenses Dividends Retained earnings, Dec. 31 Notes payable Accounts receivable...
Consultex, Inc., was founded in 2015 as a small financial consulting business. The company had done reasonably wel...
Consultex, Inc., was founded in 2015 as a small financial consulting business. The company had done reasonably well in 2015-2017 but started noticing its cash dwindle early in 2018. In January 2018, Consultex had paid $20,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,800 cash for dividends and $1.200 to repurchase and eliminate Consultex stock that had previously been issued for $1,200. To improve its cash position, Consultex borrowed $5,800...
Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by...
Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by investing capital in the amount of 74,000 pounds. The subsidiary immediately borrowed 175,000 pounds on a five-year note with 5 percent interest payable annually beginning on January 1, 2018. The subsidiary then purchased for 249,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2017, the subsidiary...
Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start...
Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: Cash $ 6,200 Accounts Payable $ 10,400 Accounts Receivable 33,250 Deferred Revenue (deposits) 4,000 Supplies 1,700 Notes Payable (long-term) 60,750 Equipment 12,200 Common Stock 7,000 Land 8,500 Retained Earnings 3,800 Building 24,100 Following are the January transactions: Received a $715 deposit from a customer...
The following account balances are for the Agee Company as of January 1, 2017, and December...
The following account balances are for the Agee Company as of January 1, 2017, and December 31, 2017. All amounts are denominated in kroner (Kr). January 1, 2017 (22,000) 47,000 (38,000) 0 (57,000) 127,000 53,000 (62,000) Accounts payable Accounts receivable Accumulated depreciation-buildings Accumulated depreciation-equipment Bonds payable-due 2020 Buildings Cash Common stock Depreciation expense Dividends (10/1/17) Equipment Gain on sale of building Rent expense Retained earnings Salary expense Sales Utilities expense December 31, 2017 (26,500) 97,000 (43,000) (6,800) (57,000) 101,500 9,800...
5 Ricky's Piano Rebuilding Company has been operating for one year. On January 1, at the...
5 Ricky's Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: 14 Cash Accounts Receivable Supplies Equipment Land Building $ 7,100 Accounts Payable 29,750 Deferred Revenue (deposits) 2,200 Notes Payable (long-term) 11,200 Common Stock 9,800 Retained Earnings 22,600 $12,500 3,550 42,250 17,000 7,350 ak + ces Following are the January transactions: a. Received a...
Required information [The following information applies to the questions displayed below.] Jaguar Plastics Company has been...
Required information [The following information applies to the questions displayed below.] Jaguar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash Investments (short-term) Accounts receivable Inventory Notes receivable (long-term) Equipment Factory building Intangibles $ 22,000 Accounts payable 2,000 Accrued liabilities payable 3,700 Notes payable (current) 29,000 Notes payable (noncurrent) 1,800 Common stock 40,000 Additional paid-in capital 105,000 Retained earnings 3,800 $22,000 2,300 6,200 49,000 9,600 86,400 31,800 During...
The following account balances are for the Agee Company as of January 1, 2017, and December...
The following account balances are for the Agee Company as of
January 1, 2017, and December 31, 2017. All amounts are denominated
in kroner (Kr).
January 1, 2017
December 31, 2017
Accounts payable
(14,000
)
(22,000
)
Accounts receivable
40,000
90,000
Accumulated depreciation—buildings
(31,000
)
(36,000
)
Accumulated depreciation—equipment
0
(6,100
)
Bonds payable—due 2020
(50,000
)
(50,000
)
Buildings
120,000
98,000
Cash
46,000
9,100
Common stock
(70,000
)
(83,000
)
Depreciation expense
0
26,000
Dividends (10/1/17)
0
43,000
Equipment...
Required information [The following information applies to the questions displayed below.) Jaquar Plastics Company has been...
Required information [The following information applies to the questions displayed below.) Jaquar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash Investments (short-term) Accounts receivable Inventory Notes receivable (long-term) Equipment Factory building Intangibles $ 22,000 Accounts payable 2,000 Accrued liabilities payable 3,700 Notes payable (current) 29,000 Notes payable (noncurrent) 1,800 Common stock 40,000 Additional paid-in capital 105,000 Retained earnings 3,800 $ 22,000 2,300 6,200 49,000 9,600 86,400 31,800...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $183,000. At...
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $183,000. At that date, the fair value of Saver’s buildings and equipment was $42,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $8,000. Trial balance data for Price and Saver...
The Copeland Company was founded on January 1, 2017; since then, the company has been fairly successful; however, in an effort to save some money, the president has been keeping track of the financial records rather than hiring a professional accountant. Although some data is missing, a comparative report of year-end account balances appears below; all numbers are as of December 31st unless noted otherwise. Rent expense Selling and admin. expenses Dividends Retained earnings, Dec. 31 Notes payable Accounts receivable...
Consultex, Inc., was founded in 2015 as a small financial consulting business. The company had done reasonably well in 2015-2017 but started noticing its cash dwindle early in 2018. In January 2018, Consultex had paid $20,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,800 cash for dividends and $1.200 to repurchase and eliminate Consultex stock that had previously been issued for $1,200. To improve its cash position, Consultex borrowed $5,800...
Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by investing capital in the amount of 74,000 pounds. The subsidiary immediately borrowed 175,000 pounds on a five-year note with 5 percent interest payable annually beginning on January 1, 2018. The subsidiary then purchased for 249,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2017, the subsidiary...
The following account balances are for the Agee Company as of January 1, 2017, and December 31, 2017. All amounts are denominated in kroner (Kr). January 1, 2017 (22,000) 47,000 (38,000) 0 (57,000) 127,000 53,000 (62,000) Accounts payable Accounts receivable Accumulated depreciation-buildings Accumulated depreciation-equipment Bonds payable-due 2020 Buildings Cash Common stock Depreciation expense Dividends (10/1/17) Equipment Gain on sale of building Rent expense Retained earnings Salary expense Sales Utilities expense December 31, 2017 (26,500) 97,000 (43,000) (6,800) (57,000) 101,500 9,800...
5 Ricky's Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: 14 Cash Accounts Receivable Supplies Equipment Land Building $ 7,100 Accounts Payable 29,750 Deferred Revenue (deposits) 2,200 Notes Payable (long-term) 11,200 Common Stock 9,800 Retained Earnings 22,600 $12,500 3,550 42,250 17,000 7,350 ak + ces Following are the January transactions: a. Received a...
Required information [The following information applies to the questions displayed below.] Jaguar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash Investments (short-term) Accounts receivable Inventory Notes receivable (long-term) Equipment Factory building Intangibles $ 22,000 Accounts payable 2,000 Accrued liabilities payable 3,700 Notes payable (current) 29,000 Notes payable (noncurrent) 1,800 Common stock 40,000 Additional paid-in capital 105,000 Retained earnings 3,800 $22,000 2,300 6,200 49,000 9,600 86,400 31,800 During...
The following account balances are for the Agee Company as of
January 1, 2017, and December 31, 2017. All amounts are denominated
in kroner (Kr).
January 1, 2017
December 31, 2017
Accounts payable
(14,000
)
(22,000
)
Accounts receivable
40,000
90,000
Accumulated depreciation—buildings
(31,000
)
(36,000
)
Accumulated depreciation—equipment
0
(6,100
)
Bonds payable—due 2020
(50,000
)
(50,000
)
Buildings
120,000
98,000
Cash
46,000
9,100
Common stock
(70,000
)
(83,000
)
Depreciation expense
0
26,000
Dividends (10/1/17)
0
43,000
Equipment...
Required information [The following information applies to the questions displayed below.) Jaquar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash Investments (short-term) Accounts receivable Inventory Notes receivable (long-term) Equipment Factory building Intangibles $ 22,000 Accounts payable 2,000 Accrued liabilities payable 3,700 Notes payable (current) 29,000 Notes payable (noncurrent) 1,800 Common stock 40,000 Additional paid-in capital 105,000 Retained earnings 3,800 $ 22,000 2,300 6,200 49,000 9,600 86,400 31,800...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago