(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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DATE ANSWERED

Oct 07, 2020

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