Compute the following ratios and measurements for 2020: 1. Cash flow from Operations to Current Liabilities 2. Rate of Return on invested capital 3. Cash flow from Operations to Total Liabilities
Compute the following ratios and measurements for 2020: 1. Cash flow from Operations to Current Liabilities 2. Rate of Return on invested capital 3. Cash flow from Operations to Total Liabilities
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....
Related questions
Question
Compute the following ratios and measurements for 2020:
1. Cash flow from Operations to Current Liabilities
2.
3. Cash flow from Operations to Total Liabilities
![Sound Break Corporation
BALANCE SHEET
December 31, 2019 and 2020
ASSETS
2019
2020
Current Assets:
P 85,000
P 75,000
25,000
Cash
Marketable Securities
25,000
Trade Receivables, net
Inventory, at cost
Prepaid Expenses
185,000
245,000
250,000
15,000
P550,000
220,000
10,000
P585,000
Total Current Assets
Property and Other Assets:
Equipment, net
P340,000
P320,000
Other Assets
15,000
15,000
Total Property and Other Assets
P355,000
P335,000
Total Assets
P905,000
P920,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Trade Payables
Accrued Expenses
P185,000
P165,000
20,000
25,000
Other Current Liabilities
10,000
P215,000
10,000
P200,000
Total Current Liabilities
Long-Term Liability
Mortgage Payable
P120,000
P120,000
Stockholders' Equity
Capital Stock, P100 par
Additional Paid-In Capital
Retained Earnings Appropriated
Retained Earnings Unappropriated
P300,000
P300,000
30,000
30,000
80,000
80,000
160,000
190,000
Total Stockholders' Equity
P570,000
P600,000
Total Liabilities and Stockholders' Equity
P905,000
P920,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb3779960-673f-4199-b90f-e2d7eef96c37%2Feb58d273-7c4b-4d6f-802c-ef1846c4c0f0%2Fgm5085_processed.png&w=3840&q=75)
Transcribed Image Text:Sound Break Corporation
BALANCE SHEET
December 31, 2019 and 2020
ASSETS
2019
2020
Current Assets:
P 85,000
P 75,000
25,000
Cash
Marketable Securities
25,000
Trade Receivables, net
Inventory, at cost
Prepaid Expenses
185,000
245,000
250,000
15,000
P550,000
220,000
10,000
P585,000
Total Current Assets
Property and Other Assets:
Equipment, net
P340,000
P320,000
Other Assets
15,000
15,000
Total Property and Other Assets
P355,000
P335,000
Total Assets
P905,000
P920,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Trade Payables
Accrued Expenses
P185,000
P165,000
20,000
25,000
Other Current Liabilities
10,000
P215,000
10,000
P200,000
Total Current Liabilities
Long-Term Liability
Mortgage Payable
P120,000
P120,000
Stockholders' Equity
Capital Stock, P100 par
Additional Paid-In Capital
Retained Earnings Appropriated
Retained Earnings Unappropriated
P300,000
P300,000
30,000
30,000
80,000
80,000
160,000
190,000
Total Stockholders' Equity
P570,000
P600,000
Total Liabilities and Stockholders' Equity
P905,000
P920,000
![Sound Break Corporation
Income and Retained Earnings Statement
For the year Ended December 31, 2020
Net Sales
P1,000,000
Cost of Goods Sold:
Inventory, Dec. 31, 2019
P250,000
Purchases
720,000
Total Goods Available
P970,000
Inventory
220,000
750,000
Gross Margin on Sales
P 250,000
Selling and Administrative (including
Depreciation of P20,000)
125,000
Net Income before Tax
P 125,000
Provision for Income Tax
35,000
Net Income for the Year
90,000
Retained Earnings, beginning
130,000
P 220,000
30,000
P 190,000
Total
Dividends Paid
Retained Earnings, December 31, 2020](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb3779960-673f-4199-b90f-e2d7eef96c37%2Feb58d273-7c4b-4d6f-802c-ef1846c4c0f0%2Fhe2tarb_processed.png&w=3840&q=75)
Transcribed Image Text:Sound Break Corporation
Income and Retained Earnings Statement
For the year Ended December 31, 2020
Net Sales
P1,000,000
Cost of Goods Sold:
Inventory, Dec. 31, 2019
P250,000
Purchases
720,000
Total Goods Available
P970,000
Inventory
220,000
750,000
Gross Margin on Sales
P 250,000
Selling and Administrative (including
Depreciation of P20,000)
125,000
Net Income before Tax
P 125,000
Provision for Income Tax
35,000
Net Income for the Year
90,000
Retained Earnings, beginning
130,000
P 220,000
30,000
P 190,000
Total
Dividends Paid
Retained Earnings, December 31, 2020
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Survey of Accounting (Accounting I)](https://www.bartleby.com/isbn_cover_images/9781305961883/9781305961883_smallCoverImage.gif)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Survey of Accounting (Accounting I)](https://www.bartleby.com/isbn_cover_images/9781305961883/9781305961883_smallCoverImage.gif)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning