From the adjusted account balance given below for the Myor Company, prepare an income statement. All accounts have normal balances
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From the adjusted account balance given below for the Myor Company, prepare an income statement. All accounts have normal balances. Accumulated Depreciation-Building 121,600 Accumulated Depreciation-Store equipment $25,000 Accounts payable 28,500 Accounts receivable 27,000 Advertising expense 12,300 Building 260,000 Cash $ 19,500 Cost of goods sold 210,000 Depreciation expense-building 24,000 Depreciation expense-store equipment 16,000 Dividends 45,000 Interest expense 1,000 Merchandise inventory 38,000 Office supplies 1,200 Office supplies expense 3,500 Retained earnings 69,900 Salaries expense 38,000 Salaries payable 10,000 Sales 453,000 Sales discounts 8,000 Sales returns and allowances 24,500 Share capital 100,000 Store equipment 80,000 *
A company had net sales of $230,000 for 2014 and $288,000 for 2015. The company's average total assets for 2014 were $150,000 and $180,000 for 2015. Calculate the total asset turnover for each year and comment on the company's efficiency in the use of its assets. *
Shaun Company purchased merchandise from Missy Company with an invoice price of $300,000 and credit terms of 2/10, n/30. The merchandise had cost Missy Company $200,000. Shock Company paid within the discount period. Assuming that Shaun Company is planning to borrow enough cash to pay the balance on the last day of the discount period at an annual interest rate of 9% and paid it back on the last day of the credit period. Would you recommend borrowing cash or pay the remaining amount when the credit term ends (n/30). (Assume a 365-day year and round dollar amounts to the nearest cent.) *
A company had net sales of $541,500 in 2014 and $475,300 in 2015. Its average assets were $410,000 for 2014 and $400,000 for 2015. (1) Calculate the total asset turnover for each year. (2) Interpret and comment on the company's efficiency in the use of its assets. *
The following information is available to reconcile Link Co.'s book balance of cash with its bank statement cash balance as of April 30. The April 30 cash balance according to the accounting records is $78,356, and the bank statement cash balance for that date is $83,525. The bank erroneously cleared a $480 check against the account in April that was not issued by Link Co. On April 30, the bank issued a credit memorandum for $53 interest earned on Link's account. When the April checks are compared with entries in the accounting records, it is found that Check No. 1828 had been correctly drawn for $1,530 to pay for advertising but was erroneously entered in the accounting records as $1,350. A credit memorandum indicates that the bank collected $10,000 cash on a note receivable for Link, deducted a $30 collection fee, and credited the balance to the company's Cash account. Link did not record this transaction before receiving the statement. A debit memorandum of $895 is enclosed with the bank statement for an NSF check for $870 received from a customer. The bank assessed a $25 fee for processing it. Link 's April 30 daily cash receipts of $5,102 were placed in the bank's night depository on that date, but do not appear on the April 30 bank statement. Link 's April 30 cash disbursements journal indicates that Check No. 1837 for $584 and Check No. 1840 for $1,219 were both written and entered in the accounting records, but are not among the canceled checks. Prepare the bank reconciliation for this company as of April 30 and the entries to update the record *
For each of the independent cases below, identify the principle of internal control that is violated, and recommend what should be done to remedy the violation. 1. In order to save money, Seagal Company has decided to drop its property insurance on assets; and stop bonding the cashiers who handle about $10,000 in cash each day. 2. Malton Company records each sale on a preprinted invoice. Since sometimes invoices are damaged in the process of being prepared, the invoices are not prenumbered, but the sales clerk writes the next number onto each invoice. 3. Marion Company is a very small business. Rob Plepley, one of the two office clerks, opens the mail each day and removes the cash receipts that come in the mail. Bob then records the receipts in the cash records and the customer's account and deposits the cash in the bank. 4. Heral Nicols, the owner of Nicols Company prides himself on hiring only the most competent employees. Nicols believes that since these employees are highly competent and to show that he trusts them completely, he feels there is no need for anyone to check up on the employees' performance. 5. Prime Products is a small business with only 3 accounting employees. Each employee is well-trained and so can perform any of the accounting tasks, including handling cash receipts and cash disbursements, and preparing the bank reconciliation. *
On May 31, Malcom has $375,800 of accounts receivable. Malcom uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 statement of financial position if: a. Sold $415,200 of merchandise (that cost $249,000) to customers on credit. b. Received $465,800 cash in payment of accounts receivable. c. Wrote off $15,800 of uncollectible accounts receivable. d. In adjusting the accounts on May 31, its fiscal year-end, the company estimated that 4.0% of accounts receivable will be uncollectible. *
Hecom had net sales of $315,000 and average accounts receivable of $75,600. Its competitor, ECom, had net sales of $299,000 and average accounts receivables of $81,350. Which company is doing a better job of managing its accounts receivables? If you are the consultant of the company, what recommendation would you give to both companies in order to improve their current performance. *
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