ACCTG300 Chapter Notes - Chapter 2: Accounts Payable, Promissory Note, Current Liability

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fuchsiapug44

14 Sep 2016

School

University of Alberta

Department

Accounting

Course

ACCTG300

Professor

Trish Stringer

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Document Summary

Assets expected to be converted to cash or used in the business within 1 year. Operating cycle is the average time it takes to go from cash to cash producing revenue. Examples: cash, short term investments, accounts receivable, inventory, prepaid assets. Not expected to be converted to cash in the business within 1 year or 1 operating cycle. Examples: long-term investments, property, plant and equipment (land, buildings, accumulated depreciation), intangible assets. Obligations that are to be paid within the coming year or 1 operating cycle. Examples: notes payable, accounts payable, accrued wages, unearned revenue. Debts expected to be paid or settled after 1 year. Usually accompanied by notes to the nancial statements. Investment of cash (or other assets) in the company by shareholders in exchange for preferred or common shares. Cumulative pro ts kept for use in the company. Financial reports should provide info that is useful in making investing, lending, and other economic decisions.

Related Questions

The comparative statements of financial position of Mikos Inc. as at December 31, 2017 and 2018, and its statement of earnings for the year ended December 31, 2018, are presented below:

MIKOS INC.
Comparative Statements of Financial Position
December 31
	2018		2017
Assets
Cash	$	10,600	$	18,600
Short-term investments		72,200		40,800
Accounts receivable		76,000		32,400
Inventories, at cost		57,200		41,600
Prepaid expenses		5,600		9,200
Land		51,400		78,000
Property, plant, and equipment, net		286,400		187,000
Intangible assets		25,600		31,200

	$	585,000	$	438,800

Liabilities and Shareholdersâ Equity
Accounts payable	$	18,600	$	43,200
Income tax payable		9,200		2,600
Accrued liabilities		11,600		-0-
Long-term notes payable		126,000		182,000
Contributed capital		232,000		68,000
Retained earnings		187,600		143,000

	$	585,000	$	438,800

MIKOS INC.
Statement of Earnings
For the Year Ended December 31, 2018
Sales			$	898,000
Cost of sales	$	446,000
Amortization expenseâintangible assets		5,600
Depreciation expenseâproperty, plant, and equipment		34,600
Operating expenses		237,000
Interest expense		13,600		736,800

Earnings before income taxes				161,200
Income tax expense				48,360

Net earnings			$	112,840

Additional information is as follows:
a.	Land was sold for cash at its carrying amount.
b.	The short-term investments will mature in February 2019.
c.	Cash dividends were declared and paid in 2018.
d.	New equipment with a cost of $167,600 was purchased for cash, and old equipment was sold at its carrying amount.
e.	Long-term notes of $18,000 were paid in cash, and notes of $38,000 were converted to shares.

1.	Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2018 by using the indirect method. (Negative answers should be indicated by a minus sign.)

crimsonshark569

Basic Financial Ratios

The accounting staff of CCB Enterprises has completed the financial statements for the 2016 calendar year. The statement of income for the current year and the comparative statements of financial position for 2016 and 2015 follow.

CCB Enterprises
Statement of Income
For the Year Ended December 31, 2016
(thousands omitted)
Revenue:
Net sales	$794,620
Other	58,420
Total revenue	$853,040
Expenses:
Cost of goods sold	$530,320
Research and development	24,480
Selling and administrative	155,320
Interest	19,600
Total expenses	$729,720
Income before income taxes	$123,320
Income taxes	49,328
Net income	$73,992

CCB Enterprises
Comparative Statements of Financial Position
December 31, 2016 and 2015
(thousands omitted)
	2016	2015
Assets
Current assets:
Cash and short-term investments	$25,910	$20,860
Receivables, less allowance for doubtful accounts
($1,130 in 2016 and $1,410 in 2015)	48,190	50,300
Inventories, at lower of FIFO cost or market	64,860	62,100
Prepaid items and other current assets	5,220	3,280
Total current assets	$144,180	$136,540
Other assets:
Investments, at cost	$105,880	$105,880
Deposits	10,160	7,980
Total other assets	$116,040	$113,860
Property, plant, and equipment:
Land	$12,100	$12,100
Buildings and equipment, less accumulated depreciation
($126,330 in 2016 and $122,240 in 2015)	268,840	247,870
Total property, plant, and equipment	$280,940	$259,970
Total assets	$541,160	$510,370
Liabilities and Ownersâ Equity
Current liabilities:
Short-term loans	$22,180	$23,900
Accounts payable	72,240	71,070
Salaries, wages, and other	26,300	26,780
Total current liabilities	$120,720	$121,750
Long-term debt	$160,620	$171,030
Total liabilities	$281,340	$292,780
Ownersâ equity:
Common stock, at par	$43,840	$42,010
Paid-in capital in excess of par	64,020	61,260
Total paid-in capital	$107,860	$103,270
Retained earnings	151,960	114,320
Total ownersâ equity	$259,820	$217,590
Total liabilities and ownersâ equity	$541,160	$510,370

Required:

1. Calculate the following financial ratios for 2016 for CCB Enterprises:

Round items h, j, and k to the nearest whole number. Round all other answers to two decimal places. Assume a 360-day year.

a. Times interest earned	to 1
b. Return on total assets	%
c. Return on common stockholders' equity	%
d. Debt-to-equity ratio (at December 31, 2016)	to 1
e. Current ratio (at December 31, 2016)	to 1
f. Quick (acid-test) ratio (at December 31, 2016)	to 1
g. Accounts receivable turnover ratio (Assume that all sales are on credit.)	times
h. Number of days' sales in receivables	days
i. Inventory turnover ratio (Assume that all purchases are on credit.)	times
j. Number of days' sales in inventory	days
k. Number of days in cash operating cycle	days

2. Which of the following statements pertaining to ratio analysis of CCB Enterprises is true?
All of these are true.

limeweasel644

I need these ratios:

Return on Assets

Return on Equity

Return on invested capital

Profit Margin

Gross Margin

Price to earnings

Asset Turnover

Fixed-Asset Turnover

Inventory Turnover

Collection Period

Days' sales in cash

Payables Period

Assets to Equity

Debt to assets

Debt to equity

Times Interest earned

Times Burden covered

Current Ratio

Acid Test

I need these calculated from bellow along with the common-sizeincome statement and common-size balance sheet from the five yearslisted below:

RUBY TUESDAY INC (RT)Statement of CASH FLOW
Fiscal year ends in May. USD in millionsexcept per share data.	2010-05	2011-05	2012-05	2013-05	2014-05	TTM
Cash Flows From Operating Activities
Net income	45	47	0	-39	-64	-8
Depreciation & amortization	64	64	68	63	57	53
Amortization of debt discount/premium andissuance costs			0	-1
Investment/asset impairment charges	3	7	31	44	25	11
Deferred income taxes	20	-1	-20	-16	2	-1
Stock based compensation	7	8	6	4	8	7
Inventory	-8	-2	6	-2	10	0
Prepaid expenses	-2	-1	-1	-2	-1	-3
Income taxes payable	10	-4	2	-1	0	2
Other working capital	-3	5	19	-19	-6	-26
Other non-cash items	4	-5	2	4	16	9
Net cash provided by operatingactivities	140	116	112	36	45	44
Cash Flows From Investing Activities
Investments in property, plant, andequipment	-18	-27	-38	-37	-28	-27
Property, plant, and equipmentreductions			6
Acquisitions, net		-4	-24
Other investing activities	8	6	22	59	22	16
Net cash used for investingactivities	-9	-24	-34	22	-6	-11
Cash Flows From Financing Activities
Debt issued			246
Debt repayment	-204	-91	-263	-27	-40	-16
Common stock issued	73
Common stock repurchased			-18	-30	-1	0
Excess tax benefit from stock basedcompensation		1	0	0	0	0
Other financing activities		-1	-5	4	0	0
Net cash provided by (used for) financingactivities	-131	-92	-40	-53	-41	-16
Net change in cash	0	0	38	5	-2	17
Cash at beginning of period	10	10	10	48	53	44
Cash at end of period	10	10	48	53	51	61
Free Cash Flow
Operating cash flow	140	116	112	36	45	44
Capital expenditure	-18	-27	-38	-37	-28	-27
Free cash flow	123	90	74	-1	17	17

RUBY TUESDAY INC (RT)CashFlowFlag BALANCE SHEET
Fiscal year ends in May. USD in millionsexcept per share data.	2010-05	2011-05	2012-05	2013-05	2014-05
Assets
Current assets
Cash
Cash and cash equivalents		10	48	53	51
Total cash		10	48	53	51
Receivables	10	7	1	1	1
Inventories	29	34	29	31	21
Deferred income taxes	14	14	27	7	3
Prepaid expenses	11				12
Other current assets	13	17	23	29	11
Total current assets	76	83	128	121	100
Non-current assets
Property, plant and equipment
Gross property, plant and equipment	1466	1597	1559	1448	1367
Accumulated Depreciation	-523	-566	-592	-589	-572
Net property, plant and equipment	943	1031	967	860	795
Goodwill		16	8
Intangible assets					13
Other long-term assets	44	57	71	62	49
Total non-current assets	988	1104	1045	922	857
Total assets	1064	1187	1174	1043	956
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt	13
Capital leases		15	12	8	5
Accounts payable	23	30	35	15	26
Taxes payable	21	41	47	11	11
Accrued liabilities	27			25	55
Deferred revenues	8	9	9	13	17
Other current liabilities	22	24	29	32
Total current liabilities	115	119	132	106	114
Non-current liabilities
Deferred taxes liabilities	40	43	38	6	4
Deferred revenues	42	60	68	78	75
Other long-term liabilities	329	373	359	337	303
Total non-current liabilities	411	476	465	421	381
Total liabilities	526	595	597	526	495
Stockholders' equity
Common stock		1	1	1	1
Additional paid-in capital	98	105	91	68	76
Retained earnings	452	499	499	460	395
Accumulated other comprehensiveincome	-13	-13	-14	-11	-11
Total stockholders' equity	538	592	576	517	461
Total liabilities and stockholders'equity	1064	1187	1174	1043	956

RUBY TUESDAY INC (RT)CashFlowFlag INCOME STATEMENT
Fiscal year ends in May. USD in millionsexcept per share data.	2010-05	2011-05	2012-05	2013-05	2014-05	TTM
Revenue	1195	1265	1326	1251	1169	1137
Cost of revenue	982	1045	1106	1020	986	942
Gross profit	213	221	220	231	182	195
Operating expenses
Sales, General and administrative	71	86	115	139	137	117
Other operating expenses	68	69	101	59	115	87
Total operating expenses	138	155	215	198	252	204
Operating income	74	66	5	33	-70	-8
Interest Expense	17	13
Other income (expense)	1	0	-20	-55
Income before taxes	58	53	-15	-22	-70	-8
Provision for income taxes	12	6	-15	2	-5	0
Net income from continuing operations	45	47	0	-23	-65	-8
Net income from discontinuing ops				-16	1	0
Net income	45	47	0	-39	-64	-8
Net income available to commonshareholders	45	47	0	-39	-64	-8
Earnings per share
Basic	0.74	0.73		-0.65	-1.07	-0.13
Diluted	0.73	0.72		-0.65	-1.07	-0.13
Weighted average shares outstanding
Basic	62	64	63	61	60	60
Diluted	62	65	63	61	60	60
EBITDA	140	130	72	97	-12	45

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ACCTG300 Chapter Notes - Chapter 2: Accounts Payable, Promissory Note, Current Liability

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