December 31, 2011 Assets Cash $ 75,100 Accounts receivable 14,000 Office supplie
ID: 2378628 • Letter: D
Question
December 31, 2011
Assets
Cash $ 75,100
Accounts receivable 14,000
Office supplies 1,500
Prepaid rent 3,400
Buses $ 240,000
Accumulated depreciation: buses (18,000) $ 222,000
--------------------------------------------------------------------------------
Total assets $ 316,000
--------------------------------------------------------------------------------
Liabilities
Accounts payable $ 140,200
Unearned revenue 94,800
--------------------------------------------------------------------------------
Total liabilities $ 235,000
--------------------------------------------------------------------------------
Stockholders' Equity
Capital stock $ 80,000
Retained earnings 1,000
--------------------------------------------------------------------------------
Total stockholders' equity $ 81,000
--------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 316,000
--------------------------------------------------------------------------------
Other information provided by the company is as follows:
Total revenue for the year ended December 31, 2011 $ 152,000
Total expenses for the year ended December 31, 2011 148,960
Total stockholders' equity, January 1, 2011 79,000
--------------------------------------------------------------------------------
Compute the following measures:
a. Net income percentage in 2011. (Omit the "%" sign in your response.)
Net income % __________
b. Return on equity in 2011. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Return on equity % _____________
c. Working capital on December 31, 2011. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)
Working capital $ ??
d. Current ratio on December 31, 2011. (Round your answers to 1 decimal place.)
Current ratio ??? to ???
Explanation / Answer
a. Net income percentage in 2011. (Omit the "%" sign in your response.) Total revenue $ 152,000 Less Total expenses 148,960 -------------------------------- Net Income 3,040 Net income % = Net Income/Total Revenue = 3040/152000 = 2.00% b. Return on equity in 2011. (Round your answer to 1 decimal place. Omit the "%" sign in your response.) Return on equity (ROE) % =Net Income/Average Common Equity = 3040/81000 = 3.8% c. Working capital on December 31, 2011. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.) Working capital =All current assets - All current liabilities that do not charge interest ie WC = (Cash + Acct Rxable) - (Acct Payable + Unearned Rev) ieWC = (75100+14000) - (140200+94800) = -145900 d. Current ratio on December 31, 2011. (Round your answers to 1 decimal place.) Current ratio = Curent Assets (CA)/Current Liabilites (CL) = (Cash + Acct Rxable)/(Acct Payable + Unearned Rev) ie CA = (75100+14000)/(140200+94800) = 0.4
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.