Question

Required information (The following information applies to the questions displayed below.] Milea Inc. experienced the following events in 2018, its first year of operations: 1. Received $12,000 cash from the issue of common stock. 2. Performed services on account for $45,000. 3. Paid the utility expense of $1,400. 4. Collected $33,110 of the accounts receivable. 5. Recorded $5,600 of accrued salaries at the end of the year. 6. Paid a $1,150 cash dividend to the stockholders. Required a. Record the events in general ledger accounts under an accounting equation. In the last column of the table, provide appropriate account titles for the Retained Earnings amounts. The first transaction has been recorded as an example. (Select "NA" if there is no effect on the "Accounts Titles for Retained Earnings". Enter any decreases to account balances with a minus sign.) MILEA INC. General Ledger Accounts For the Year Ended December 31, 2018 Assets = Liabilities + Stockholders' Equity Accounts - Salaries Common Common Retained Retained Receivable Payable Stock Earnings 12,000 12,000 Accounts Titles for Retained Earnings Event Cash NA + + + + + Totals +

Answer 1

Milea Inc. Requirement a Requirement bi + 45000 General Ledger Accounts For the Year ended 31.12.2018 Assets Liabilities Accounts = Salaries Event Cash Receivable = Payable 12000 45000 - 1400 33110 -33110 5600 - 1150 Totals 42560 11890 11890 Stockholders Equity Common Retained Account Titles for Stock Earnings Retained Earnings 12000 45000 Services on account -1400 Utility expense paid Income Statement For the period ending 31.12.2018 Service Revenue Less: Utility Expense Salary Expense Net Income 1400 5600 7000 38000 Requirement b2 -5600 -1150 0 Salary accrued Dividends 5600 12000 Statement of Changes in Stockholders Equity For the period ending 31.12.2018 Beginning Common Stock Add:Cash 12000 Ending Common Stock Beginning Retained Earnings Add:Net Income 38000 Less:Dividends - 1150 Ending Retained Earnings Total Stockholders Equity 36850 48850

Requirement b3 Balance sheet As at 31.12.2018 Assets Cash 42560 11890 54450 Accounts Receivable Total Assets Liabilities Salary Payable Total Liabilities 5600 5600 12000 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 36850 48850 54450 Requirement b4 38000 Statement of Cashflows For the period ending 31.12.2018 Cashflow from Operating Activity Net Income Adjustments Increase in Accounts Receivable Increase in Salary Payable Cash generated from Operating activity -11890 5600 -6290 31710 Cashflow from Investing Activity Cash generated from Investing activity 12000 -1150 Cashflow from Financing Activity Common Stock issued Dividends paid Cash generated from Financing activity Net Increase in Cash Beginning Cash Balance Ending Cash Balance 10850 42560 42560

Baird Company a.Accounts Receivable Turnover = Sales / Avg.Net Accounts Receivable = 2006000 / (388550 + 363840)/2 = 2006000 / 376195 = 5.33 b.Inventory Turnover = Cost of goods sold / Avg.Inventory = 1596000 / ( 475500 + 439000)/2 = 1596000 / 457250 = 3.49 c.Net Margin = Net Income / Sales = (2421000 - 1874300) / 2421000 = 22.58% Finch Company a.Current Ratio = Current Assets / Current Liabilities = (14750 + 8340 + 12860 + 10700 ) / ( 8420 + 3640) = 46650 / 12060 = 3.87 b.Earning per share = Net Income /No. of outstanding shares = 14300 / 880 = 16.25 c.Quick Ratio - Quick Assets / Current Liabilities = (14750 + 8340 + 12860 ) / 12060 = 2.98 d.Return on Investment = = Net Income /( Mortgage Payable + Bonds Payable + Common Stock + Retained Earnings) = 14300 / ( 4150 + 21120 + 113200 + 56720) = 14300 / 195190 = 7.33% e. Return on Equity = Net Income / (Common Stock + Retained Earnings) = 14300 / ( 113200 + 56720) = 8.42% f.Debt to Equity Ratio = Total Liabilities/Total Equity = (8420 + 3640 +4150 + 21120)/(113200 + 56720) = 37330 / 169920 = 21.97%