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In: Accounting

Lasko Trial Balance as of 12/31/17 each account has a normal balance. Use this financial information...

Lasko Trial Balance as of 12/31/17 each account has a normal balance.

Use this financial information to answer the questions below.

Unearned Revenue	$25,000
Supplies	$15,500
Sales	$140,000
Salaries Expense	$22,000
Retained Earnings	$29,000
Rent Expense	$18,600
Additional Paid in Capital	$76,000
Insurance Expense	$4,500
Prepaid Insurance	$6,000
Office Equipment	$50,000
Notes Payable (Due 06/30/2018)	$12,000
Dividends	$5,000
Cost of Goods Sold	$72,400
Cash	$80,000
Capital Stock $1 par	$4,000
Accumulated Depreciation	$15,000
Accounts Receivable	$72,000
Depreciation Expense	$5,000
Accounts Payable	$50,000

1) What is the gross profit for Lasko for the year ended 12/31/17?

$67,600
$72,400
$92,600
$140,000
2) Using the Lasko Trial Balance as given above, then the most likely total for owner equity at 12/31/2017?
$151,500
$126,500
$121,500
$80,000
3) Using the Lasko Trial Balance as given above and that Lasko had a gross profit ratio (gross margin ratio) for 2016 of 50%, you can determine that for Lasko which of the following is true?
Their ability to generate profit from sales is worse than for the year 2016.
Their ability to generate profit from sales is better than for the year 2016.
Their ability to generate profit from sales is unchanged compared to the year 2016.
Can’t determine the gross profit ratio (gross margin ratio)in 2017 – not enough information.
4) Using the Lasko Trial Balance as given above and that Lasko had a current ratio for 2016 of 1.5:1; you can determine that for Lasko which of the following is true?
Their ability to pay short term obligations is worse than at the end of 2016.
Their ability to pay short term obligations is better than at the end of 2016.
Their ability to pay short term obligations is unchanged compared to the end of 2016.
5) Assuming that the only depreciable asset is the office equipment, the information shown in the trial balance indicates that the office equipment has been used by Lasko for how many years?
5 Years
4 Years
3 Years
2 Years
6) Looking at the Lasko Trial Balance for accuracy and based on what accounts are already listed, which of the following accounts should be included but are not?
Supplies expense
Interest expense
Allowance for Doubtful Accounts
All of the above accounts would be expected.

Expert Solution

1) What is the gross profit for Lasko for the year ended 12/31/17?

Gross profit = Sales - Cost of goods sold = $140,000 - $72,400 = $67,600

2) Using the Lasko Trial Balance as given above, then the most likely total for owner equity at 12/31/2017?

Total owner equity = $121,500

3) Using the Lasko Trial Balance as given above and that Lasko had a gross profit ratio (gross margin ratio) for 2016 of 50%, you can determine that for Lasko which of the following is true?

Their ability to generate profit from sales is worse than for the year 2016.

4) Using the Lasko Trial Balance as given above and that Lasko had a current ratio for 2016 of 1.5:1; you can determine that for Lasko which of the following is true?

Their ability to pay short term obligations is better than at the end of 2016.

5) Assuming that the only depreciable asset is the office equipment, the information shown in the trial balance indicates that the office equipment has been used by Lasko for how many years?

3 Years

6) Looking at the Lasko Trial Balance for accuracy and based on what accounts are already listed, which of the following accounts should be included but are not?

All of the above accounts would be expected.

ekkarill92 answered 2 hours ago

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