Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 1, Problem 1.4E
To determine
Introduction:
Financial statements are a complete record of the financial transactions that takes place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements as shown in the figure below:
Basic Financial Statements
Figure (1)
To Prepare: Income statement and
To determine
To Prepare: Retained earnings statement for the year ending December 31, 2017.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The following is a summary of information presented on the financial statements of a company on December 31, 2018
Account
2018
2017
Current Assets
 $       86,000.00
 $      70,000.00
Accounts Receivable
 $       61,000.00
 $      69,000.00
Merchandise Inventory
 $       63,000.00
 $      56,000.00
Current Liabilities
 $       56,000.00
 $      49,000.00
Long-term Liabilities
 $       40,000.00
 $      53,000.00
Common Stock
 $       71,000.00
 $      57,000.00
Retained Earnings
 $       69,000.00
 $      49,000.00
With respect to Long-term Liabilities, a horizontal analysis reveals ________.
A
long-term liabilities decreased by 24.56%
B
long-term liabilities decreased by 24.53%
C
long-term liabilities decreased by $14,000
D
long-term liabilities decreased by $7,000
Using the information below calculate the ROC of the company
Years       Revenue ($M)         Net Income ($M)
2012Â Â Â Â Â Â Â Â Â Â 221.8 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2.9
2013Â Â Â Â Â Â Â Â Â Â Â 473.8 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 20.2
2014 Â Â Â Â Â Â Â Â Â Â Â 627.7 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 36.4
2015Â Â Â Â Â Â Â Â Â Â Â 947.8 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 45.0
2016 Â Â Â Â Â Â Â Â Â Â 1,015.5Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 50.3
2017Â Â Â Â Â Â Â Â Â Â 1,046.2 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 64.9
2018Â Â Â Â Â Â Â Â Â Â 1,293.2 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 90.4
Â
Years    Â
Total Assets ($M)
Fixed Assets ($M)
Current Assets ($M)
Total Equity ($M)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Retained Earnings ($M)
2012
430
286
144
293
12.8
2013
956
501
455
558
33.0
2014
922
668
324
620
69.4
2015
1103
796
307
665
114.4
2016
1120
835
285
729
164.7
2017
1294
738
556
805
229.6
2018
2053
703
1350
934
320
Access the February 21, 2017, filing of the December 31, 2016, 10-K report of The Hershey Company (ticker: HSY) at SEC.gov and complete the following requirements. Required Compute or identify the following profitability ratios of Hershey for its years ending December 31, 2016, and December 31, 2015. Interpret its profitability using the results obtained for these two years. 1. Profit margin ratio (round the percent to one decimal). 2. Gross profit ratio (round the percent to one decimal). 3. Return on total assets (round the percent to one decimal). (Total assets at year-end 2014 were $5,622,870 in thousands.) 4. Return on common stockholders’ equity (round the percent to one decimal). (Total shareholders’ equity at year-end 2014 was $1,519,530 in thousands.) 5. Basic net income per common share (round to the nearest cent).
Chapter 1 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Accounting is ingrained in our society and is...Ch. 1 - Prob. 5QCh. 1 - Prob. 6QCh. 1 - What are the three main types of business...Ch. 1 - Prob. 8QCh. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - What are the three main categories of the...Ch. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Which of these items are liabilities of White...Ch. 1 - How are each of the following financial statements...Ch. 1 - What is the purpose of the management discussion...Ch. 1 - Prob. 19QCh. 1 - Prob. 20QCh. 1 - Prob. 21QCh. 1 - Prob. 1.1BECh. 1 - Match each of the following types of evaluation...Ch. 1 - Indicate in which part of the statement of cash...Ch. 1 - Prob. 1.4BECh. 1 - Prob. 1.5BECh. 1 - Prob. 1.6BECh. 1 - Indicate which statement you would examine to find...Ch. 1 - Prob. 1.8BECh. 1 - Prob. 1.9BECh. 1 - Prob. 1.10BECh. 1 - Prob. 1.11BECh. 1 - Prob. 1.1DIECh. 1 - Prob. 1.2DIECh. 1 - Prob. 1.3ADIECh. 1 - Prob. 1.3BDIECh. 1 - Here is a list of words or phi uses discussed in...Ch. 1 - Prob. 1.3ECh. 1 - Prob. 1.4ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Prob. 1.11ECh. 1 - Prob. 1.12ECh. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.1APCh. 1 - Financial decisions often place heavier emphasis...Ch. 1 - Prob. 1.3APCh. 1 - Prob. 1.4APCh. 1 - Prob. 1.5APCh. 1 - Prob. 1.1EYCTCh. 1 - Prob. 1.2EYCTCh. 1 - Prob. 1.3EYCTCh. 1 - INTERPRETING FINANCIAL STATEMENTS Xerox was not...Ch. 1 - Prob. 1.5EYCTCh. 1 - Prob. 1.6EYCTCh. 1 - Prob. 1.7EYCTCh. 1 - Prob. 1.8EYCTCh. 1 - Prob. 1.9EYCTCh. 1 - Prob. 1.10EYCTCh. 1 - Prob. 1.1IFRSCh. 1 - Prob. 1.2IFRSCh. 1 - Prob. 1.3IFRS
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.Similar questions
- Using the following Company W information, prepare a Retained Earnings Statement. Retained earnings balance January 1, 2019, $43,500 Net income for year 2019, $55,289 Dividends declared and paid for year 2019, $18,000arrow_forwardThe following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2019: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of owners equity. 3. Prepare a balance sheet, assuming that the current portion of the note payable is 50,000. 4. Briefly explain how multiple-step and single-step income statements differ.arrow_forwardLansing Company’s 2018 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2017 and 2018, follow. LANSING COMPANYIncome StatementFor Year Ended December 31, 2018 Sales revenue $ 100,200 Expenses   Cost of goods sold  43,000 Depreciation expense  12,500 Salaries expense  19,000 Rent expense  9,100 Insurance expense  3,900 Interest expense  3,700 Utilities expense  2,900 Net income $ 6,100    LANSING COMPANYSelected Balance Sheet Accounts At December 31 2018  2017  Accounts receivable $ 5,700  $ 6,000  Inventory  2,080   1,590  Accounts payable  4,500   4,800  Salaries payable  900   710  Utilities payable  240   170  Prepaid insurance  270   300  Prepaid rent  240   190    Required:Prepare the cash flows from operating activities section only of the company’s 2018 statement of cash flows using the direct method. (Amounts to be…arrow_forward
- Use the following tables to answer the question:  LOGIC COMPANY Income Statement For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Gross sales 19,800 15,600 Sales returns and allowances 900 100 Net sales 18,900 15,500 COGS 11,800 8,800 Gross profit 7,100 6,700 Depreciation 780 640 Selling and administrative expenses 2,800 2,400 Research 630 540 Miscellaneous 440 340 Total operating expenses 4,650 3,920 Income before interest and taxes 2,450 2,780 Interest expense 640 540 Income before taxes 1,810 2,240 Provision for taxes 724 896 LOGIC COMPANY Balance Sheet For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Current assets 12,300 9,400 Accounts receivable 16,900 12,900 Merchandise inventory 8,900 14,400 Prepaid expenses 24,400 10,400 Total current assets 62,500 47,100 Building (net) 14,900 11,400 Land 13,900 9,400 Total plant and equipment 28,800 20,800 Total assets 91,300 67,900 Accounts payable 13,400 7,400 Salaries payable 7,500 5,400 Total current…arrow_forwardThe 2017 annual report of Tootsie Roll Industries contains the following information. (in millions) December 31, 2017 0000 December 31, 2016 Total assets $930.9 $920.1 Total liabilities 197.1 208.6 Net sales 515.7 517.4 Net income 80.7 67.2 Instructions Compute the following ratios for Tootsie Roll for 2017. a.   Asset turnover. b.   Return on assets. c.   Profit margin on sales. d.   How can the asset turnover be used to compute the return on assets?arrow_forwardOriole Corporation recently filed the following financial statements with the SEC.  Look at the image for the balance sheet and more! Oriole CorporationIncome Statement for the FiscalYear Ended July 31, 2017 Net sales  $77,630 Cost of products sold  55,218 Gross profit  $22,412 Selling, general, and administrative expenses  9,893 Depreciation  1,124 Operating income (loss)  $11,395 Interest expense  688 Earnings (loss) before income taxes  $10,707 Income taxes  3,748 Net earnings (loss)  $6,959  Use the DuPont identity to calculate the return on equity (ROE). In the process, calculate the following ratios: net profit margin, total asset turnover, equity multiplier, EBIT return on assets (EROA), and return on assets. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 52.75 or 52.75%.) Net profit margin   % Total asset turnover   Equity multiplier   EBIT return on assets   % Return on assets   %…arrow_forward
- The following information is taken Aiello Corporation's fiscal 2016 annual report.   Selected Balance Sheet Data 2016 2015 Inventories........................ $221,418 $226,893 Accounts Receivable........... $121,333 $122,087  Assume that Aiello Corporation had $1,003,881 sales on credit during fiscal year 2016. What amount did the company collect from credit customers during the year?   a. $1,003,881 b. $1,004,635 c. $1,003,127 d. $1,247,301arrow_forwardCalculate each of following ratios for year 2017 using the financial statement in Table 1-3. Accounts receivable turnover Days sales outstanding (DSO) Accounts payable turnover Days payable outstanding (DPO) Total Asset turnover Fixed asset turnover Liquidity Ratio Current ratio Quick ratio  Liability to assets Interest coverage ratio Profitability Ratios ROA ROE Gross profit margin Operating profit margin Net operating profit margin  Table 1: Balance Sheet Statement for 2017 Cash $7,282 Short-Term invest. 20,000 Accounts Receivable 632,160 Inventories   1,287,360 Total Current Assets 1,946,802 Gross Property, Plant & Equipment 1,202,950 Less: Depreciation 263,160 Net Property, Plant & Equipment 939,790 Total assets $2,886,592 Accounts payable $324,000 Notes payable 720,000 Accruals 284,960 Total Current Liability 1,328,960 Long-term debt   1,000,000   Common stock 460,000 Retained earnings 97,632   Total equity   557,632   Total Liability & Equity   $2,886,592 Table 2:…arrow_forwardInstructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio 4. Inventory turnover 5. Accounts receivable turnover 6. Times interest earned 7. Profit margin 8. Days in inventory 9. Payout ratio 10. Return on assetsarrow_forward
- Following are selected accounts for Best Buy, Inc., for the fiscal year ended February 2, 2019. (a) Indicate whether each account appears on the balance sheet (B) or income statement (I). Best Buy, Inc. ($ millions)Amount Classification Sales $42,879 Answer B I  Accumulated depreciation 6,690 Answer B I Depreciation expense  770 Answer B I Retained earnings 2,985 Answer B I  Net income 1,464 Answer B I  Property, plant & equipment, net 2,510 Answer B I  Selling, general and admin expense 8,015 Answer B I Accounts receivable 1,015 AnswerB I  Total liabilities 9,595 Answer B I Stockholders' equity 3,306 Answer B I (b) Using the data, compute total assets and total expenses. Total Assets Answer Total Expenses Answer answer complete and correct and in detail with all workarrow_forwardByers Company presents the following condensed income statement for 2019 and condensed December 31, 2019, balance sheet: Compute the following ratios for Byers ( round all computations to two decimals): ( 1) earnings per share, ( 2) gross profit margin, ( 3) operating profit margin, ( 4) net profit margin, ( 5) total asset turnover, ( 6) return on assets, (7) return on common equity, (8) receivables turnover (in days), and (9 ) interest coverage.arrow_forwardWilton Felder Ltd is finalising its financial statements for the year ended 31 October 2024. You are presented with the following information: Income statement for the year ended 31 October 2024 £ 175,900 Sales revenue Cost of Sales (99,370) Gross profit 76,530 Operating expenses Interest income (51,280) 40 1,400 Finance costs Profit before tax 23,890 Corporation tax expenses (6,450) Profit for the year 17,440 Balance sheets as at 31 October Non-current assets Property plant & equipment at cost Less Accumulated Depreciation Current Assets Inventory Trade receivable Cash at bank and in hand Total assets Current liabilities Trade and other payables Corporation tax payable Non-current liabilities Bank Loans Net assets Equity Share capital Share premium Retained earnings Total equity 31/10/24 £ 132,040 (32,210) 99,830 24,130 17,520 4,220 45,870 145,700 20,060 5,270 25,330 28,320 92,050 24,410 13,800 53,840 92,050 31/10/23 £ 111,580 (28,870) 82,710 27,220 11,740 2,140 41,100 123,810 17,860…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License