Saturday 8 February 2014

Exercise 1-15: Preparing a balance sheet L.O P1 On October 1, Keisha King organized Real Answers, a new consulting firm. On October 31, the company's records show the following items and amounts. Use the following information to prepare an October 31 balance sheet for Real Answers. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.) Cash $ 8,200 Cash withdrawals by owner $ 2,000 Accounts receivable 18,000 Consulting fees earned 20,000 Office supplies 17,425 Rent expense 3,600 Land 46,000 Salaries expense 8,000 Office equipment 18,000 Telephone expense 760 Accounts payable 30,750 Miscellaneous expenses 580 Owner investments 71,815 REAL ANSWERS Balance Sheet October 31 Assets Liabilities Cash $ 8200 Accounts payable $ 30750 Accounts receivable 18000 Office supplies 17425 Equity Office Equipment 18000 King, Capital 76875 Land 46000 Total assets $ 107625 Total liabilities and equity $ 107625


Exercise 1-15: Preparing a balance sheet L.O P1

On October 1, Keisha King organized Real Answers, a new consulting firm. On October 31, the company's records show the following items and amounts. Use the following information to prepare an October 31 balance sheet for Real Answers. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.)
Cash
$ 8,200

Cash withdrawals by owner
$ 2,000
Accounts receivable
18,000

Consulting fees earned
20,000
Office supplies
17,425

Rent expense
3,600
Land
46,000

Salaries expense
8,000
Office equipment
18,000

Telephone expense
760
Accounts payable
30,750

Miscellaneous expenses
580
Owner investments
71,815




REAL ANSWERS
Balance Sheet
October 31
Assets


Liabilities


Cash
$
8200
Accounts payable
$
30750
Accounts receivable

18000



Office supplies

17425
Equity


Office Equipment

18000
King, Capital

76875
Land

46000



Total assets
$
107625
Total liabilities and equity
$
107625

Exercise 2-13: Computing net income L.O. A1, P3 A proprietorship had the following assets and liabilities at the beginning and end of a recent year. Assets Liabilities Beginning of the year $ 96,500 $ 41,369 End of the year 146,000 59,130 ________________________________________ Determine the net income earned or net loss incurred by the business during the year for each of the following separate cases. (Net Loss amount should be indicated by a minus sign. Omit the "$" sign in your response.) a. Owner made no investments in the business and no withdrawals were made during the year. Net Income (13%) $ 17761 (0%) b. Owner made no investments in the business but withdrew $1,250 cash per month for personal use. Net Income (13%) $ 2761 (0%) c. No withdrawals were made during the year but the owner invested an additional $45,000 cash. Net Loss (13%) $ -27239 (0%) d. Owner withdrew $1,250 cash per month for personal use and the owner invested an additional $25,000 cash. Net Income (13%) $ 19130 (0%)


Exercise 2-13: Computing net income L.O. A1, P3

A proprietorship had the following assets and liabilities at the beginning and end of a recent year.
 
Assets
Liabilities
Beginning of the year
$
96,500
 
$
41,369

End of the year

146,000
 

59,130


Determine the net income earned or net loss incurred by the business during the year for each of the following separate cases. (Net Loss amount should be indicated by a minus sign. Omit the "$" sign in your response.)

a.
Owner made no investments in the business and no withdrawals were made during the year.


Net Income (13%)
$
  17761   (0%)

b.
Owner made no investments in the business but withdrew $1,250 cash per month for personal use.


Net Income (13%)
$
  2761   (0%)

c.
No withdrawals were made during the year but the owner invested an additional $45,000 cash.


Net Loss (13%)
$
  -27239   (0%)

d.
Owner withdrew $1,250 cash per month for personal use and the owner invested an additional $25,000 cash.


Net Income (13%)
$
  19130   (0%)

Exercise 3-9: Computing and interpreting profit margin L.O. A2 Requirement 1: Use the following information to compute profit margin for each separate company a through e. (Round your answer to 1 decimal place. Omit the "%" sign, which is provided for you.) Net Income Net Sales Profit Margin a. $ 4,818 $ 40,490 11.9 (20%) % b. 78,919 360,361 21.9 (20%) % c. 82,854 230,793 35.9 (20%) % d. 57,900 1,315,925 4.4 (20%) % e. 66,768 392,753 16.9 (0%) % Requirement 2: Which of the five companies is the most profitable according to the profit margin ratio? Your Answer: Choice Selected Company A Company B Company C Company D Company E


Exercise 3-9: Computing and interpreting profit margin L.O. A2


Requirement 1:
Use the following information to compute profit margin for each separate company a through e. (Round your answer to 1 decimal place. Omit the "%" sign, which is provided for you.)


Net Income
Net Sales
Profit Margin

  a.

$   4,818


$       40,490


11.9 (20%) %


  b.

78,919


360,361


21.9 (20%) %


  c.

82,854


230,793


35.9 (20%) %


  d.

57,900


1,315,925


4.4 (20%) %


  e.

66,768


392,753


  16.9   (0%) %



Requirement 2:
Which of the five companies is the most profitable according to the profit margin ratio?

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Your Answer:
Choice
Selected
Company A

Company B

Company C
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Company D

Company E