I need help creating the generalized statement. I’ve been working on it all day

Question

I need help creating the generalized statement. I’ve been working on it all day and I got the answers wrong. Additional information given : current portion mortgage payable $512 Owner equity January $21,996 Account receivable January $3,760 Worksheet ends dec 31. 7/30/2018 CengageNowv2 | Online leaching and leaming resource from Cengage Leaming 1. PR 15.09A Guided Algo (Algonithmi Recelvasie balsnce on January 1, 20, was $3,760. The current portion of Mortpage Payaole is $512. All sales are credit sales. For Year Ended December 31, 20- TRIAL BALANCE ADJUST MENTS ADJUSTED TR?ALBALANCEINCOME STATEMENT BALANC, SHEET . ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT 15,840 2,360 14,982 CREDIT DEBIT CREDIT DEBIT CREDIT Acceumts Receivable Merchandise Inventory 15,840 2.360 16,490 2,360 (b) 16,490 (a) 14,982 (c) 208 (d) 159 16,490 Prepaid Insurance Equipment Accum. Depr.-Eqioment 636 477 5,044 (e) 434 868 Accounts Payable 4,858 4,858 Nages Payable Sales Tax Payable (1) 338 , |Mortgage Payable 8. Paulson, Capital D. Paulson, Drawing 4,050 23,948 23,948 23,948 1,208 (a) 14,982 (b) 16,490 14,982 16,490 14,982 16,490 71,600 income Summary 71,600 Sales Returns and 1,332 Punchases Returns and Allewances Purchases Discounts 1,042 772 1,042 772 1,042 772 () 338 22,660 22,322 316 Wages Expense Advertising Expense Supplies Expense Phone Expense Utities Expense Insurance Expense Depr. Expense-Equipment Miscelianeous Expense Interest Expense 316 208 208 688 (c) 208 (d) 159 (e) 434 159 159 160 160 107.560 107.560 32.611 32,611 124,822 124,822 82,779 89,904 42,043 34,918 7,125 89,904 89,904 42,043 42,043

Explanation / Answer

Working:

Working capital = Current assets - Current liabilities = $35791 - $6564 = $29227 Current ratio = Current assets/Current liabilities = $35791/$6564 = 5.45 Quick ratio = Quick assets/Current liabilities = ($35791 - $16490 - $477)/$6564 = $18824/$6564 = 2.87 Return on owner's equity = Net income/Average owner's equity = $7125/$25930.50 = 27.48% Average owner's equity = [$21996 + ($23948 + $7125 - $1208)]/2 = [$21996 + 29865]/2 = $51861/2 = $25930.50 Accounts receivable turnover = Total revenue/Average accounts receivable = ($71600 - $1332)/$3060 = $70268/$3060 = 22.96 Average accounts receivable = ($2360 + $3760)/2 = $6120/2 = $3060 Average number of days to collect receivables = 365 days/Accounts receivable turnover = 365/22.96 = 15.90 Inventory turnover = Cost of goods sold/Average inventory = $37730/$15736 = 2.40 Average inventory = ($14982 + $16490)/2 = $31472/2 = $15736 Average number of days to sell inventory = 365 days/Inventory turnover = 365/2.40 = 152.08

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