106) Complete the following balance sheet by entering the appropriate amounts in the blanks
provided.
ASSETS
Cash
$15,000
Accounts receivable
(A.)
_______
Building
$60,000
Accumulated depreciation
(B.)
_______
35,000
Total Assets
(C.)
_______
LIABILITIES
Accounts Payable
$11,000
Notes payable, short-term
12,000
Income taxes payable
Total current liabilities
(D)
_______
$25,000
Mortgage payable
25,000
Total Liabilities
50,000
STOCKHOLDERS’
EQUITY
Common stock
$25,000
Retained earnings
15,000
Total Stockholders’ Equity
(E.)
______
Total Liabilities and
Stockholders’ Equity
(F.)
______
58
107) FocusMore, Inc., had the following list of accounts taken from its adjusted trial balance at
December 31, 2019:
Accounts Payable
$15,000
Accounts Receivable
18,000
Accumulated Depreciation-
Building
26,200
Advertising Expense
12,800
Building
100,000
Common Stock
60,000
Cash
15,000
Cost of Goods Sold
56,500
Depreciation Expense
2,000
Utilities Expense
3,800
Utilities Payable
1,900
Inventory
25,000
Land
30,000
Prepaid Insurance
4,600
Interest Revenue
2,500
Retained Earnings (Jan. 1, 2019)
58,000
Wages Expense
48,000
Wages Payable
4,600
Sales
150,000
Supplies Inventory
1,200
Supplies Expense
2,000
Deferred Rent Revenue
700
Required:
Prepare a multiple step income statement for the year ended December 31, 2019. (Include gross
profit, but ignore income taxes.)
108) The following data were taken from the adjusted trial balance of Kent Corporation.
Kent Corporation
Adjusted Trial Balance Data
December 31, 2019
Accounts Payable
$12,000
Accounts Receivable
13,000
Accumulated Depreciation-Building
6,000
Accumulated Depreciation-
Equipment
9,000
Building
60,000
Common Stock
40,000
Cash
24,000
Copyrights
22,000
Dividends Declared
12,000
Equipment
15,000
Land
25,000
Note Payable (10%, due in 5 years)
40,000
Office Supplies
1,000
Prepaid Insurance
3,000
Retained Earnings (January 1, 2019)
23,000
Wages Payable
2,000
Service Revenue
85,000
Wages Expense
28,000
Utilities Expense
2,000
Depreciation Expense
5,000
Insurance Expense
2,000
Office Supplies Expense
1,000
Interest Expense
4,000
Prepare a classified balance sheet in good form at December 31, 2019. (Ignore income taxes).
109) Anthony Inc. reported the following amounts on its 2018 and 2019 income statements:
2019
2018
Net Sales
$20,438
$20,367
Cost of sales
7,943
8,198
A. Compute the gross profit percentage for years 2018 and 2019.
B. Provide at least two potential causes for the change in Anthony’s gross profit percentage.
110) Twin Lakes, Inc. reported the following December 31 amounts in its financial statements:
2019
2018
Sales revenue
$250.0
$210.0
Gross profit
75.0
68.0
Net income
28.0
21.0
Total assets
90.0
80.0
Total stockholders’ equity
40.0
36.0
Compute the following for the 2019 ratios:
A. Gross profit percentage
B. Net profit margin
C. Total asset turnover
D. Return on assets
111) The following information was taken from the income statement and balance sheet of The
Mickey Company for the years 2018 and 2019:
2019
2018
Sales revenues
$30,752
$27,061
Net income
2,345
1,267
Total assets
53,902
49,988
Total stockholders’ equity
26,081
23,791
Compute the following ratios for 2019:
A. Net profit margin
B. Total asset turnover
C. Return on assets
112) Determine the effect of the following transactions on the identified financial statement
components and ratios. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company issued common stock at a price in excess of par value.
Revenues _____
Assets _____
Stockholders’ equity _____
Return on assets ratio _____
Transaction 2: A company recorded depreciation expense at year-end.
Net income _____
Assets _____
Stockholders’ equity _____
Total asset turnover ratio _____
113) Determine the effect of the following transactions on the identified financial statement
components and ratios. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company accrued interest expense at year-end.
Net income _____
Assets _____
Stockholders’ equity _____
Total asset turnover ratio _____
Transaction 2: A company declared and paid cash dividends to stockholders.
Net income _____
Assets _____
Stockholders’ equity _____
Return on assets ratio _____
114) Determine the effect of the following transactions on the identified financial statement
components and ratios. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company paid for research and development costs incurred to develop a patent.
Net income _____
Property, plant, and equipment _____
Stockholders’ equity _____
Net profit margin ratio _____
Transaction 2: Inventory was purchased on account.
Net income _____
Current assets _____
Current liabilities _____
Return on assets ratio _____
115) Determine the effect of the following transactions on the identified financial statement
components and ratios. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company acquired land by signing a long-term note payable.
Property, plant, and equipment _____
Total asset turnover ratio _____
Net profit margin ratio _____
Return on assets ratio _____
Transaction 2: Cash was used to pay a current liability.
Net income _____
Total asset turnover ratio _____
Net profit margin ratio _____
Return on assets ratio _____
116) Determine the effect of the following transactions on the financial statements components
identified. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C: If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company sold inventory for an amount greater than its cost.
Gross profit _____
Current assets _____
Stockholders’ equity _____
Transaction 2: Advertising expense was recorded but has yet to be paid for.
Net income _____
Gross Profit _____
Stockholders’ equity _____
117) For the year ending December 31, 2019, the accounts of Jackson Corporation showed the
following balances:
Common stock, January 1, 2019
$500,000
Retained earnings, beginning
balance, January 1, 2019
$100,000
Total revenues earned during 2019
$150,000
Total expenses incurred during
2019
$90,000
Total dividends declared during
2019
$10,000
Issuance of stock during 2019
$50,000
Determine the components of stockholders’ equity as of December 31, 2019.
118) The following income statement was reported for Bauer Inc. for the first year of operations
ending December 31, 2019 reported (in thousands of dollars):
Sales revenue
$24,500
Expenses:
Cost of Sales
$14,700
Wages
3,300
Rent
700
Utilities
500
Miscellaneous
200
Total Expenses
19,400
Income before taxes
5,100
Income tax expense
1,785
Net income
$3,315
A. Calculate gross profit percentage.
B. Calculate net profit margin.
C. Calculate earnings per share if there are 200,000 shares of common stock outstanding.
119) Describe the return on assets ratio and the DuPont approach for calculating return on assets.