Accounting final Questions and Graded Answers.
Swiss Group reports net income of $40,000 for the year. At the beginning of the year, Swiss
Group had $200,000 in assets. By the end of the year, assets had grown to $300,000.What is
Swiss Group's return on assets for the current year? Did Swiss Group perform better or worse
than its competitors if competitors average an 11% return on assets? - 1. Return on assets=
net come/average total assets
40000/(200000+300000)/2 [250000]=16%
2. better
Home Demo reports the following: Total liabilities = $38,633 million and Total assets = $42,966
million.(a) Compute Home Demo's debt ratio.(b) Assuming Lows Hardware (a competitor) has a
debt ratio of 60%, which company has higher risk from financial leverage? - 1. debt ratio
= total liabilities/total assets= 38,633 million/42,966 million = 0.899 or 89.9%
2. Home Demo
Gomez Company reported net income of $48,025 and net sales of $425,000 for the current
year.(a) Compute Gomez's profit margin.(b) Assuming Cruz (a competitor) has a profit margin
of 15%, which company is generating more profit on each dollar of sales? - 1. net
income/net sales = profit margin
48025/425000 = 11.3%
2. Cruz is generating more profit on each dollar of sales
Accounts receivable $ 18,000
Long-term notes payable $ 21,000
Accounts payable$ 11,000
Office supplies $2,600
, Buildings $45,000
Prepaid insurance $3,200
Cash $7,000
Unearned services revenue $3,000
Compute Chavez Company's current ratio using the above information. - 1. current
assets/current liabilities = current ratio
(cash + receivables + supplies + prepaid insurance)/(accounts payable + unearned services
revenue) =current ratio
30800/14000 = 2.2
On December 31, Hawkin's records show the following accounts.
Cash $5,100
Accounts Receivable $600
Supplies $2,000
Equipment $14,000
Accounts Payable $6,000
Common stock $6,900
Retained earnings, December 1 $4,000
Dividends $1,000
Services Revenue $16,000
Wages Expense $8,000
Rent Expense $1,500
Utilities Expense $700
Use the above information to prepare a December income statement for Hawkin. -
Revenues
-service revenue 16,000
Swiss Group reports net income of $40,000 for the year. At the beginning of the year, Swiss
Group had $200,000 in assets. By the end of the year, assets had grown to $300,000.What is
Swiss Group's return on assets for the current year? Did Swiss Group perform better or worse
than its competitors if competitors average an 11% return on assets? - 1. Return on assets=
net come/average total assets
40000/(200000+300000)/2 [250000]=16%
2. better
Home Demo reports the following: Total liabilities = $38,633 million and Total assets = $42,966
million.(a) Compute Home Demo's debt ratio.(b) Assuming Lows Hardware (a competitor) has a
debt ratio of 60%, which company has higher risk from financial leverage? - 1. debt ratio
= total liabilities/total assets= 38,633 million/42,966 million = 0.899 or 89.9%
2. Home Demo
Gomez Company reported net income of $48,025 and net sales of $425,000 for the current
year.(a) Compute Gomez's profit margin.(b) Assuming Cruz (a competitor) has a profit margin
of 15%, which company is generating more profit on each dollar of sales? - 1. net
income/net sales = profit margin
48025/425000 = 11.3%
2. Cruz is generating more profit on each dollar of sales
Accounts receivable $ 18,000
Long-term notes payable $ 21,000
Accounts payable$ 11,000
Office supplies $2,600
, Buildings $45,000
Prepaid insurance $3,200
Cash $7,000
Unearned services revenue $3,000
Compute Chavez Company's current ratio using the above information. - 1. current
assets/current liabilities = current ratio
(cash + receivables + supplies + prepaid insurance)/(accounts payable + unearned services
revenue) =current ratio
30800/14000 = 2.2
On December 31, Hawkin's records show the following accounts.
Cash $5,100
Accounts Receivable $600
Supplies $2,000
Equipment $14,000
Accounts Payable $6,000
Common stock $6,900
Retained earnings, December 1 $4,000
Dividends $1,000
Services Revenue $16,000
Wages Expense $8,000
Rent Expense $1,500
Utilities Expense $700
Use the above information to prepare a December income statement for Hawkin. -
Revenues
-service revenue 16,000
