🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
HomeClass Notes1,200,000US530,000

ACCT 2000 Lecture Notes - Lecture 2: Public Company Accounting Oversight Board, Accounts Payable, Going Concern

155 views10 pages
School
LSU
Department
Accounting
Course
ACCT 2000
Professor
E.Briggs

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Chapter 2 class notes: identify the sections of a classified balance sheet, use ratios to evaluate a company"s profitability, liquidity, and solvency, discuss financial reporting concepts. The classified balance sheet: reports the assets, liabilities, and equity at a. ____point in time________________: groups together similar assets and similar liabilities, using standard classifications. Intangible assets: has value, but you can"t see or touch it. Liquidity: how quickly you convert something into cash. Accumulated depreciation (contra asset)- is what has been used up over time. The 19,00 above is the book value (original value). For example, a roof had insurance for 20 years. 10 years after the insurance ran out, the value of the roof decreased. Current liabilities order: notes payable then accounts payable. Assets a company expects to convert to cash or use up within one year or an operating cycle whichever is longer.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

ACCT 2000 Lecture Notes - Lecture 2: Accounts Payable, Promissory Note, Current Liability
plummacaw892
ACCT 2000 Lecture Notes - Lecture 2: Public Company Accounting Oversight Board, International Accounting Standards Board, Accounting
turquoisewoodchuck900
ACCT 2000 Chapter : ACCT Chapter 2
azuremammoth471

Related Questions

Oceanview MarineCompany Assignment 2
Balance Sheet
31-Dec-15
Assets 2015 2014 2013
Current Assts
Cash $ 1,320,096 $ 1,089,978 $ 1,200,347
AccountsReceivable: $ 1,646,046 $ 1,285,593 $ 1,180,982
Inventories $ 13,524,349 $ 12,356,400 $ 11,461,231
PrepaidExpenses $ 17,720 $ 15,826 $ 15,275
Deposits $ 7,916 $ 5,484 $ 4,329
Total CurrentAssets $ 16,516,127 $ 14,753,281 $ 13,862,164
Property, Plant, Equipment
at cost, less accumulated depreciation $ 596,517 $ 612,480 $ 627,771
TOTAL ASSETS $ 17,112,644 $ 15,365,761 $ 14,489,935
LIABILITIES
CurrentLiabilites
Note Payable -Bank $ 5,100,000 $ 4,250,000 $ 4,000,000
Accountspayable $ 1,750,831 $ 1,403,247 $ 1,106,574
AccruedLiabilities $ 257,800 $ 217,003 $ 211,250
Federal IncomeTax Payable $ 35,284 $ 45,990 $ 39,725
Current portionof long-term debt $ 5,642 $ 5,642 $ 5,642
TotalCurrent Liabilities $ 7,149,557 $ 5,921,882 $ 5,363,191
Long-Term Liabilities
Long-TermDebt $ 409,824 $ 415,466 $ 421,108
TOTAL LIABILITIES $ 7,559,381 $ 6,337,348 $ 5,784,299
STOCKHOLDERS EQUITY
Common Stock $ 10,000 $ 10,000 $ 10,000
Additional paid in capital $ 2,500,000 $ 2,500,000 $ 2,500,000
Retaind Earnings $ 7,043,263 $ 6,518,413 $ 6,195,636
Total Stockholder Equity $ 9,553,263 $ 9,028,413 $ 8,705,636
TOTAL LIABILITIES AND STOCKHOLDEREQUITY $ 17,112,644 $ 15,365,761 $ 14,489,935
Liquidity ratios: unadjusted 12/31/2015 unadjusted 12/31/2014 CHANGE Percent Change Industry Average
CurrentRation 2.31 2.49 -0.18 -7.23% 1.53
Quick Ratio 0.42 0.4 0.02 5.00% 0.43
Sales/ReceivableRatio 16.05 17.78 -1.73 -9.73% 20.29
Number of dayssales in A/R ? ? ? ? 17.99
InventoryTurnover ? ? ? ? 1.41
PROFITABILITY/PERFORMANCE RATIOS:
Gross Profit Margin (%) ? ? ? ? 39.83%
Income before taxes / owners' equity ? ? ? ? 0.06
Income before taxes / total assets 0.06 0.04 0.02 50.00% 0.04
Sales / Long - term assets 44.29 37.33 6.96 18.64% 19.07
Sales / Total Assets 1.54 1.49 0.05 3.36% 1.32
Sales / Working Capital 2.82 2.59 0.23 8.88% 2.18
SOLVENCY RATIOS
Owners Equity / Total Assets 0.56 0.59 -0.03 -5.08% 0.31
Long - Term Assets / owners' Equity 0.06 0.07 -0.01 -14.29% 0.47
Current Liabilities / Owners Equity ? ? ? ? 1.13
Total Liabilities / Owners Equity ? ? ? ? 2.03
Please answer the questionmarks and show computation
Oceanview MarineCompany 1-1
Balance Sheet
31-Dec-15
Assets 2015 2014 2013
Current Assts
Cash $ 1,320,096 $ 1,089,978 $ 1,200,347
AccountsReceivable: Notes 2 and 5 $ 1,646,046 $ 1,285,593 $ 1,180,982
Inventories *Notes 1a, 3, and 5 $ 13,524,349 $ 12,356,400 $ 11,461,231
PrepaidExpenses $ 17,720 $ 15,826 $ 15,275
Deposits $ 7,916 $ 5,484 $ 4,329
Total CurrentAssets $ 16,516,127 $ 14,753,281 $ 13,862,164
Property, Plant, Equipment *Notes 1b and 4
at cost, less accumulated depreciation $ 596,517 $ 612,480 $ 627,771
TOTAL ASSETS $ 17,112,644 $ 15,365,761 $ 14,489,935
LIABILITIES
CurrentLiabilites
Note Payable -Bank * Note 5 $ 5,100,000 $ 4,250,000 $ 4,000,000
Accountspayable $ 1,750,831 $ 1,403,247 $ 1,106,574
AccruedLiabilities $ 257,800 $ 217,003 $ 211,250
Federal IncomeTax Payable $ 35,284 $ 45,990 $ 39,725
Current portionof long-term debt $ 5,642 $ 5,642 $ 5,642
TotalCurrent Liabilities $ 7,149,557 $ 5,921,882 $ 5,363,191
Long-Term Liabilities
Long-TermDebt $ 409,824 $ 415,466 $ 421,108
TOTAL LIABILITIES $ 7,559,381 $ 6,337,348 $ 5,784,299
STOCKHOLDERS EQUITY
Common Stock - * Note 7 $ 10,000 $ 10,000 $ 10,000
Additional paid in capital $ 2,500,000 $ 2,500,000 $ 2,500,000
Retaind Earnings $ 7,043,263 $ 6,518,413 $ 6,195,636
Total Stockholder Equity $ 9,553,263 $ 9,028,413 $ 8,705,636
TOTAL LIABILITIES AND STOCKHOLDEREQUITY $ 17,112,644 $ 15,365,761 $ 14,489,935
Liquidity ratios: unadjusted 12/31/2015 unadjusted 12/31/2014 CHANGE Percent Change Industry Average
CurrentRation 2.31 2.49 -0.18 -7.23% 1.53
Quick Ratio 0.42 0.4 0.02 5.00% 0.43
Sales/ReceivableRatio 16.05 17.78 -1.73 -9.73% 20.29
Number of dayssales in A/R ? ? ? ? 17.99
InventoryTurnover ? ? ? ? 1.41
PROFITABILITY/PERFORMANCE RATIOS:
Gross Profit Margin (%) ? ? ? ? 39.83%
Income before taxes / owners' equity ? ? ? ? 0.06
Income before taxes / total assets 0.06 0.04 0.02 50.00% 0.04
Sales / Long - term assets 44.29 37.33 6.96 18.64% 19.07
Sales / Total Assets 1.54 1.49 0.05 3.36% 1.32
Sales / Working Capital 2.82 2.59 0.23 8.88% 2.18
SOLVENCY RATIOS
Owners Equity / Total Assets 0.56 0.59 -0.03 -5.08% 0.31
Long - Term Assets / owners' Equity 0.06 0.07 -0.01 -14.29% 0.47
Current Liabilities / Owners Equity ? ? ? ? 1.13
Total Liabilities / Owners Equity ? ? ? ? 2.03
Please answer the questionmarks and show computation


The following accounts (in no particular order) are for PerfectReb Corporation for the fiscal year ended December 31, 2015. (S/T =Short-Term; L/T = Long-Term)

REQUIRED:

A) Calculate Perfect Reb Corporation’s netincome or net loss for the 2015 fiscal year. You may solve this inany

manner that you wish, but it is highly recommended to prepare amultiple step income statement.

B) Using proper form, prepare Perfect RebCorporation’s balance sheet for 2015.

C) Using the information provided, solve forthe requested ratios and respond to the correspondingquestions.

Common Stock (13,000 shares outstanding)

$52,000

Sales Discounts

$5,000

Accrued Expenses (Payables)

20,000

Income Tax Expense (25% of IBIT)

???

Miscellaneous Operating Expenses

50,000

Cash

142,000

Accounts Receivable

20,000

Interest Expense

4,000

Buildings

186,000

Marketable Securities

62,000

Retained Earnings

???

Notes Payable (due in 5 years)

12,000

Wages Expense

60,000

Rent Expense

11,000

Inventory

40,000

Unearned Revenue

19,000

Accumulated Depreciation – Buildings

48,000

Allowance for Uncollectible Accounts

15,000

Accounts Payable

41,000

Sales

433,000

Gain on Sale of Equipment

62,000

Mortgage Payable ($12,000 S/T)

144,000

Land

50,000

Sales Returns & Allowances

12,000

Bad Debt Expense

2,000

Depreciation Expense

11,000

L/T Investments

7,000

Cost of Goods Sold

109,000

Notes Receivable ($2,000 S/T)

13,000

Interest Revenue

3,000

A) NET INCOME (10 points) – SHOW ALL WORK ANDCALCULATIONS!!!!

B) CLASSIFIED BALANCE SHEET (15 points)

Perfect Reb Corporation Balance Sheet December 31,2015

ASSETS

LIABILITIES

Current Assets

Current Liabilities

Total Current Liabilities

Total Current Assets

Long-Term Assets

Long-Term Liabilities

Total Long-Term Assets

Total Long Term Liabilities

Fixed Assets

Total Liabilities

EQUITY

Total Fixed Assets

Total Equity

TOTAL ASSETS

TOTAL LIABILITIES & EQUITY

C) RATIOS AND ANALYSIS (15 points):

Use the financial statements and additional information tocalculate the ratios. Round your answers to two decimalplaces. Be sure to label your answer correctly (example,%, times, days, etc.). IF AN ANSWER SHOULD BE EXPRESSED ASA PERCENTAGE, DO NOT LEAVE IT IN DECIMAL FORM!!!! (i.e. 0.5015 =50.15%!!!!)

Previous (December 31, 2014) year end balancesfor:

Accounts receivable, net of allowanceInventory

Stockholders’ Equity

Market price per share for one share of common stock atDec 31, 2015 Dividend per share for one share of common stock forFYE Dec 31, 2015

$2,000 15,000 139,000

$94.50/share $1.25/share

No new shares of common stock were issued during 2015.The company’s credit policy is net 15.

RATIO

CALCULATION

ANSWER

1) Quick (Acid-Test) Ratio (2points)

2) Dividend Yield (2points)

3) Gross Profit Percentage (2points)

4) Average Days’ Sales Uncollected 2points)

5) Inventory Turnover (2points)

6) Price-Earnings Ratio (2points)

7) Using the liquidity ratios (and generalaccepted norms for the current ratio and quick/acid-test ratio),comment on the company’s financial position. (3points)