ACC 110 Lecture Notes - Financial Statement, Income Statement, Deferred Tax

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viridianzebra871

6 Oct 2012

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Current assets are assets that will be used up, sold, or converted to cash within one year or one operating cycle. Current liabilities will be paid or satisfied within one year or one operating cycle. It"s assumed below that the period to be applied is one year. a. b. c. d. e. f. g. h. Current asset, since the inventory is expected to be sold within one year. Current liability, since these amounts must be paid within 60 days. Current asset, since the amount is expected to be collected in less than one year. Non-current asset, since the machines will be used for more than one year unless there is an expectation that they will be replaced or sold within the year. Non-current asset, since machines are used over more than one period. An exception would be if there is an expectation that it will be sold soon.

Related Questions

A current liability is a debt that can reasonably be expected to be paid

a. within one year, or the operating cycle, whichever is longer

b. between 6 months and 18 months

c. out of currently recognized revenues

d. out of cash currently on hand

salmonfly506

A current liability is a debt that is reasonably expected to be paid

a. within one year, or the operating cycle, whichever is longer

b. between 6 months and 18 months

c. out of currently recognized revenues

d. out of cash currently on hand

pinktiger335

Financial Information for Case9-1


Industy Wide
Balance Sheets
Years Ended December 31, 2014and 2015

	2015	2014
Assets
Current Assets:
Cash	$ 30,000	$ 25,000
Accounts receivable	110,000	90,000
Inventories	100,000	80,000
Total Current Assets	240,000	195,000
Fixed Assets;
Plant and equipment	250,000	220,000
Less accumulated depreciation	(100,000)	(65,000)
Land	50,000	50,000
Total Fixed Assets	200,000	205,000
Total Assets	$ 440,000	$ 400,000
Liabilities and Equity
Current Liabilities:
Accounts payable	$ 58,000	$ 50,000
Notes payable-due within one year	50,000	50,000
Accrued liabilities	-	-
Total Current Liabilities	108,000	100,000
Long Term Liabilities	32,000	20,000
Total Liabilities	140,000	120,000
Stockholders' Equity:
Common stock	100,000	100,000
Retained earnings	200,000	180,000
Total Stockholders' Equity	300,000	280,000
Total Liabilities and Equty	$ 440,000	$ 400,000

Industry Wide
Income Statement
Years Ended December 31, 2014and 2015

Revenues	$ 1,100,000	$ 1,000,000
Cost of goods sold	(700,000)	(650,000)
Gross margin	400,000	350,000
Operating expenses	(275,000)	(255,000)
Operating income	125,000	95,000
Interest expense	(15,000)	(15,000)
Income before taxes	110,000	80,000
Income taxes	(44,000)	(32,000)
Net income	$ 66,000	$ 48,000

Financial Information for Case9-1


Industy Wide
Balance Sheets
Years Ended December 31, 2014and 2015

	2015	2014
Assets
Current Assets:
Cash	$ 30,000	$ 25,000
Accounts receivable	110,000	90,000
Inventories	100,000	80,000
Total Current Assets	240,000	195,000
Fixed Assets;
Plant and equipment	250,000	220,000
Less accumulated depreciation	(100,000)	(65,000)
Land	50,000	50,000
Total Fixed Assets	200,000	205,000
Total Assets	$ 440,000	$ 400,000
Liabilities and Equity
Current Liabilities:
Accounts payable	$ 58,000	$ 50,000
Notes payable-due within one year	50,000	50,000
Accrued liabilities	-	-
Total Current Liabilities	108,000	100,000
Long Term Liabilities	32,000	20,000
Total Liabilities	140,000	120,000
Stockholders' Equity:
Common stock	100,000	100,000
Retained earnings	200,000	180,000
Total Stockholders' Equity	300,000	280,000
Total Liabilities and Equty	$ 440,000	$ 400,000

Industry Wide
Income Statement
Years Ended December 31, 2014and 2015

Revenues	$ 1,100,000	$ 1,000,000
Cost of goods sold	(700,000)	(650,000)
Gross margin	400,000	350,000
Operating expenses	(275,000)	(255,000)
Operating income	125,000	95,000
Interest expense	(15,000)	(15,000)
Income before taxes	110,000	80,000
Income taxes	(44,000)	(32,000)
Net income	$ 66,000	$ 48,000

1. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for 2014 and 2015 for the JordanCorporation.

2. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for the Industry.

3. Compare the performance of the Jordan Corporation between2014 and 2015 and comment on the trend of each ratio.

4. Compare the performance of the Jordan Corporation in 2015 tothe industry averages and comment on each.

sapphirehorse715

ACC 110 Lecture Notes - Financial Statement, Income Statement, Deferred Tax

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