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(Answered)-Hello, you did a project for me but it was incomplete
Hello, you did a project for me but it was incomplete
Journalize the adjusting entries
adjusting journals
Buildings
Depreciation
Equipment
Depreciation
Interest
notes payable
Dr
Cr
10000
10000
9000
90000
7000
7000
Income statement and retained earnings
Total sales
sales discount
Net sales revenue
Less: Cost of goods
sold
beginning stock
add purchases
add freight in
less purchase discount
less ending stock
cost of goods sold
Gross profit
operating expenses
selling expenses
gas and oil expense
salaries expense
administrative expenses
Depreciation
salaries expense
Utilities
repair expense
insurance expense
Total operating expense
Operating income
Retained earnings
less dividends
Less interest expense
Net income
Closing entries
886100
-4600
881500
62400
725100
12400
-16000
-90000
693900
187600
7200
55840
19000
13960
9400
5900
3500
114800
72800
67800
-10000
-7000
123600
retained earnings
dividends
Dr
10000
1000
0
selling expenses
gas and oil
expense
salaries expense
7200
5584
0
administrative
expenses
Depreciation
1900
0
1396
0
9400
5900
3500
salaries expense
Utilities
repair expense
insurance expense
Income statement
Cr
12480
0
Ratios
a) Current Ratio
current assets ? current liabilities
161000/44500=3.62
b) Quick Ratio
(Current assets- inventory) ? Current liabilities
(161000-90000)/44500=1.60
c) Working Capital
Current assets-current liabilities
161000-44500=116500
d) Accounts Receivable Turnover
Net Credit Sales / Average Accounts Receivable
Average account receivables= (36600+34750)/2=35675
881500/35675=24.71
e) Average Collection Period
Days Sales Outstanding = 360 Days / Receivable Turnover
365/24.71=14.7=15 days
f) Inventory Turnover
Inventory Turnover = Cost of Sales / Average Inventory
693900/76200=9.11
g) Days in Inventory
Days Inventory Outstanding = 360 Days / Inventory Turnover
360/9.11=39.5=40 days
h) Debt to Total Assets Ratio
total liabilities ? total assets
87500/437100= 0.2
i) Gross Profit Ratio
Gross income ? net revenue
187600/881500=0.21
j) Profit Margin Ratio
Net income ? net revenue
123600/881500=0.14
k) Return on Assets Ratio
Net income ? total assets
123600/437100=0.28
l) Asset Turnover Ratio
Analysis
1. The company is able to meet its current and long term obligations as they become
due. This is because the current ratio is above 1. Also the working capital is positive
indicating the company can be able to meets its obligations.
2. The profitability of the company is produced with a high cost of sales. Therefore,
the company should find ways to reduce the cost of sales.
3. I would lend money to the company since it can be able to meet both short term and
long term obligations.
4. The company has average collection period of 15 days.
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STATUSAnswered
QUALITYApproved
DATE ANSWEREDOct 07, 2020
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