Financial statements for Perez Company follow.
| PEREZ COMPANY | |||||||
| Balance Sheets As of December 31 |
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| 2019 | 2018 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash | $ | 21,500 | $ | 17,500 | |||
| Marketable securities | 21,100 | 7,100 | |||||
| Accounts receivable (net) | 52,000 | 44,000 | |||||
| Inventories | 137,000 | 145,000 | |||||
| Prepaid items | 26,000 | 11,000 | |||||
| Total current assets | 257,600 | 224,600 | |||||
| Investments | 32,000 | 25,000 | |||||
| Plant (net) | 265,000 | 250,000 | |||||
| Land | 29,000 | 24,000 | |||||
| Total assets | $ | 583,600 | $ | 523,600 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Notes payable | $ | 30,200 | $ | 12,900 | |||
| Accounts payable | 98,800 | 85,000 | |||||
| Salaries payable | 26,000 | 20,000 | |||||
| Total current liabilities | 155,000 | 117,900 | |||||
| Noncurrent liabilities | |||||||
| Bonds payable | 150,000 | 150,000 | |||||
| Other | 26,000 | 21,000 | |||||
| Total noncurrent liabilities | 176,000 | 171,000 | |||||
| Total liabilities | 331,000 | 288,900 | |||||
| Stockholders’ equity | |||||||
| Preferred stock, (par value $10, 5% cumulative, non-participating; 6,000 shares authorized and issued) | 60,000 | 60,000 | |||||
| Common stock (no par; 50,000 shares authorized; 10,000 shares issued) | 60,000 | 60,000 | |||||
| Retained earnings | 132,600 | 114,700 | |||||
| Total stockholders’ equity | 252,600 | 234,700 | |||||
| Total liabilities and stockholders’ equity | $ | 583,600 | $ | 523,600 | |||
| PEREZ COMPANY | |||||||
| Statements of Income and Retained Earnings For the Years Ended December 31 |
|||||||
| 2019 | 2018 | ||||||
| Revenues | |||||||
| Sales (net) | $ | 340,000 | $ | 320,000 | |||
| Other revenues | 10,200 | 7,200 | |||||
| Total revenues | 350,200 | 327,200 | |||||
| Expenses | |||||||
| Cost of goods sold | 170,000 | 136,000 | |||||
| Selling, general, and administrative | 66,000 | 61,000 | |||||
| Interest expense | 11,300 | 10,500 | |||||
| Income tax expense | 78,000 | 77,000 | |||||
| Total expenses | 325,300 | 284,500 | |||||
| Net earnings (net income) | 24,900 | 42,700 | |||||
| Retained earnings, January 1 | 114,700 | 79,000 | |||||
| Less: Preferred stock dividends | 3,000 | 3,000 | |||||
| Common stock dividends | 4,000 | 4,000 | |||||
| Retained earnings, December 31 | $ | 132,600 | $ | 114,700 | |||
Required
Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet.
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In: Accounting
Payne Corporation has the following accounts as of December 31, 2018:
Total Assets $ 60,000
Total Liabilities 20,000
Total Equity 40,000
Compute the debt to equity ratio at December 31, 2018.
In: Accounting
Baxter company failed to accrue $30,000 of salary expense at the end of 2017. The salaries expense was recorded as paid in 2018. Ignoring taxes, what journal entry will Baxter make in 2018 to correct this error?
In: Accounting
Myrna and Geoffrey filed a joint tax return in 2018. Their AGI was $85,000, and itemized deductions were $24,700, which included $7,000 in state income tax and no other state or local taxes. In 2019, they received a $1,800 refund of the state income taxes they paid in 2018. The standard deduction for married filing jointly in 2018 was $24,000. Under the tax benefit rule, what amount of the state income tax refund is included in gross income in 2019?
In: Accounting
In: Accounting
Pharoah Company's equity securities portfolio which is
appropriately included in current assets is as follows:
| December 31, 2018 | ||||||
|---|---|---|---|---|---|---|
| Cost | Fair Value | Unrealized Gain (Loss) | ||||
| Catlett Corp. | $180000 | $151000 | $-29000 | |||
| Lyman, Inc. | 173000 | 185000 | 12000 | |||
$353000 | $336000 | $-17000 | ||||
Ignoring income taxes, what amount should be reported as a charge
against income in Pharoah's 2018 income statement if 2018 is
Pharoah's first year of operation?
In: Accounting
Inventory Errors Haywood Inc. reported the following information for 2018: Beginning inventory $25,000 Ending inventory 53,440 Sales revenue 1,000,000 Cost of goods sold 620,000 A physical count of inventory at the end of the year showed that ending inventory was actually $65,000.
Required: 1. What is the correct cost of goods sold and gross profit for 2018?
Assuming the error was not corrected, what is the effect on the statement of financial position at December 31, 2018?
In: Accounting
In 2018, X Company expects to produce and sell 66,000 units of its only product for $34.73. The following are budgeted variable costs per unit:
| Direct Materials | $5.39 |
| Direct Labor | $5.27 |
| Variable Overhead | $4.31 |
| Variable selling and administrative | $4.32 |
| Total | $19.29 |
Budgeted fixed overhead for 2018 is $187,440, and budgeted fixed selling and administrative expenses are $190,740.
What is X Company's budgeted contribution margin rate for 2018?
In: Accounting
Verizon Communications financial leverage the last 3 years.
Debt to Assets Ratio: 2016= 91% 2017= 83% 2018=80%
Debt to Equity Ratio: 2016=4.68% 2017= 2.64% 2018=1.99%
Interest Coverage Ratio: 2016=5.80% 2017=5.35% 2018= 5.06%
How is Verizon financing it's assets? Discuss how much risk is associated with the bonds issued by the company? How can this risk be measured? Please Explain.
In: Finance
On February 18, 2018, Union Corporation purchased $1,976,000 of
IBM bonds. Union will hold the bonds indefinitely, and may sell
them if their price increases sufficiently. On December 31, 2018,
and December 31, 2019, the market value of the bonds was $1,924,000
and $2,002,000, respectively.
Required:
2. & 3. Prepare the adjusting entry for
December 31, 2018 and 2019. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field.)
In: Accounting