User Account

All Pages

acc, Basic Statistics

Assignment Help:
Project I


The trial balance of the Parton Wholesale Company contained the following accounts at December 31, 2010 the end of the company’s calendar year.

PARTON WHOLESALE COMPANY
Trial Balance
31-Dec-10

Debit Credit
Cash $ 34,400
Accounts Receivable 36,600
Merchandise Inventory (Beginning) 62,400
Land 92,000
Buildings 197,000
Accumulated Depreciation-Buildings $ 54,000
Equipment 83,500
Accumulated Depreciation-Equipment 42,400
Notes Payable 50,000
Accounts Payable 37,500
Common Stock 200,000
Retained Earnings 67,800
Dividends 10,000
Sales 886,100
Sales Discounts 4,600
Purchases 725,100
Purchase Discounts 16,000
Freight-in 12,400
Salaries Expense 69,800
Utilities Expense 9,400
Repair Expense 5,900
Gas and Oil Expense 7,200
Insurance Expense 3,500
$ 1,353,800 $ 1,353,800




Adjustment data:
1. Depreciation is $10,000 on buildings and $9,000 on equipment. (Both are administrative expenses.)
2. Interest of $7,000 is unpaid on notes payable at December 31.

Other data:
1. Merchandise inventory on hand at December 31, 2010 is $90,000.
2. Salaries are 80% selling and 20% administrative.
3. Utilities expense, repair expense, and insurance expense are 100% administrative.
4. $15,000 of the notes payable are payable next year.
5. Gas and oil expense is a selling expense.
6. The beginning balance of accounts receivable is $34,750.
7. The amount of total assets at the beginning of the year is $469,225.

Instructions
1) Journalize the adjusting entries.

2) Prepare a multiple-step income statement and a retained earnings statement for the year ended, as well as a classified balance sheet as of December 31, 2010.

3) Prepare the following ratios and show all support for your computations:

a) Current Ratio
b) Quick Ratio
c) Working Capital
d) Accounts Receivable Turnover
e) Average Collection Period
f) Inventory Turnover
g) Days in Inventory
h) Debt to Total Assets Ratio
i) Gross Profit Ratio
j) Profit Margin Ratio
k) Return on Assets Ratio
l) Asset Turnover Ratio


4) Based on the ratios computed in 3) above, answer the following questions and use the financial statement ratios to support your answers where appropriate:

• Do you feel that the company is able to meet its current and long term obligations as they become due?

• Comment on the profitability of the company with respect to the various profitability ratios that you computed.

• Would you lend money to this company for the long term?

• Comment on the ability of the company to collect its receivables and mange inventory.



2007 2008 2009 Industry Average
Liquidity
Current 2.39 2.68 2.90 3.12
Quick 1.10 1.16 1.21 1.56
Working Capital $ 98,750.00 $ 100,450.00 $ 103,000.00 $ 110,000.00
Leverage
Debt to Total Assets (%) 20.97% 21.98% 22.89% 20.89%
Times Interest Earned 8.75 9.12 9.56 10.22
Activity
Inventory Turnover (sales) 8.21 9.91 10.12 10.52
Fixed Asset Turnover 3.43 3.51 3.59 3.64
Total Asset Turnover 2.15 2.20 2.25 2.56
Average Collection Period (days) 14.95 14.69 14.42 14.28
Accounts Receivable Turnover 24.08 24.50 24.97 25.21
Days in Inventory 44.46 36.83 36.07 43.21
Profitability
Gross Profit Margin (%) 21.10% 22.50% 24.03% 24.56%
Net Profit (%) 6.89% 7.25% 7.89% 8.03%
Return on Total Assets (%) 15.50% 16.10% 16.24% 16.07%
Return on Equity (%) 20.15% 21.89% 22.15% 22.06%
Payout Ratio (%) 15.10% 15.84% 16.09% 16.86%

Related Discussions:- acc

Conditional probability, The U.S. Department of Transportation reported tha...

The U.S. Department of Transportation reported that during November, 83.4% of Southwest Airlines’ flights, 75.1% of US Airways’ flights, and 70.1% of JetBlue’s flights arrived on t

Calculate the p-value and test statistic, 1.  This assignment is important...

1.  This assignment is important in providing feedback and helping to establish competency in essential skills. 2.  Answer all the questions. The questions are not of equal weig

Define Annuity , Annuity A sequence of equivalent money payments made or o...

Annuity A sequence of equivalent money payments made or obtained at equivalent durations over a specific time period.

Capitalization policy, Capitalization policy The criteria used to decide w...

Capitalization policy The criteria used to decide which capital outlays should be reported as capital assets on the whole state are financial statements,

Find the value, Find the value of E (i+). Show your calculation. i=7 i=3

Find the value of E (i+). Show your calculation. i=7 i=3

Derive an expression for the autocorrelation, i)A sionusodial signal has t...

i)A sionusodial signal has the form x(t) = Asin?t Derive an expression for the autocorrelation Rxx(λ) II) Explain the significance of this result in term of the frequen

Sampling Error, Use the concepts of sampling error and z scores to explain ...

Use the concepts of sampling error and z scores to explain the concept of distribution of sample means.

Hydrogen, Can Hydrogen be liquefied at room temperature

Can Hydrogen be liquefied at room temperature

Descriptive analysis , All Excel output should be copied into a single Word...

All Excel output should be copied into a single Word document where you must enter all of your responses to the questions below. Format the document professionally so it flows well

Spss, what is spss explain in breif

what is spss explain in breif

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd