Question

i dont know questions 9 and 10

Use the following information to answer the next six questions:

All balances are as of 12/31/2017 unless specified otherwise.

Loss on the Sale of Equipment	62,250	Income Tax Expense	48,750
Short Term Investments	1,500	Inventory	97,500
Retained Earnings, 1/1/17	281,000	Gain on Sale of Equipment	27,500
Goodwill	50,000	Cost of Goods Sold	204,000
Common Stock	???	Notes Payable 5/1/18	12,500
Cash	70,000	Sales Revenue	447,500
Accumulated Depreciation	50,000	Dividends	10,000
Notes Payable, due 12/31/19	104,500	Prepaid Expenses	2,500
Furniture	83,000	Accrued Expenses	28,000
Equipment	372,500	Accounts Receivable	42,000
Operating Expenses	43,000	Accounts Payable	36,000

Working Capital as of December 31, 2017.

		137,000

Retained Earnings and Cash as of 12/31/2017.

	D.	Retained Earnings                Cash $388,000 $70,000

Total Liabilities as of 12/31/2017.

E.

$181,000

Income from Operations for 2017.

		$200,500

Determine the Total Assets as of 12/31/2017.

	A.	$719,000
	B.	$769,000
	C.	$679,000
	D.	$669,000
	E.	$696,500

1 points   

QUESTION 10

Determine the Profit Margin for the year ended December 31, 2017.

	A.	26%
	B.	37%
	C.	54%
	D.	382%
	E.	$243,500

Answer 1

Answer:

Calculation of Total Assets, 12/31/2017:

Total Assets = Total Current Assets + Total Fixed Assets + Tangible Assets
Total Current Assets = Short Term Investments + Cash + Inventory + Prepaid Expenses + Accounts Receivable
Total Current Assets = $1,500 + $70,000 + $97,500 + $2,500 + $42,000
Total Current Assets = $213,500

Total Fixed Assets = Furniture + Equipment – Accumulated Depreciation
Total Fixed Assets = $83,000 + $372,500 - $50,000
Total Fixed Assets = $405,500

Tangible Assets = Goodwill = $50,000

Total Assets = $213,500 + $405,500 + $50,000
Total Assets = $669,000

Total Assets as of 12/31/2017 are $669,000.

Calculation of Profit Margin for the year ended December 31, 2017:

Profit Margin = Net Income / Sales * 100
Sales = $447,500

Net Income = Revenue – Expenses
Revenue = Sales Revenue + Gain on Sale of Equipment
Revenue = $447,500 + $27,500 = $475,000

Expenses = Loss on Sale of Equipment + Operating Expenses + Income Tax Expenses
Expenses = $62,250 + $43,000 + $48,750
Expenses = $154,000

Net Income = $475,000 - $154,000
Net Income = $321,000

Profit Margin = 321,000 / 447,500 * 100
Profit Margin = 71.73%