Accounting Assignment Paper

ACCOUNTING
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Course
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3.2] Income statement
Income statementSales $525,000 Cost of goods sold     200,000Gross profit$325,000 General and administrative expenses62,000Depreciation expenses8,000Earnings Before Interest and Taxes$255,000 Interest expense12,000Income taxes97,200Net income$145,800 
3.6] Warner Company
Net working capital, operating working capital and debt ratio
Net working capital= current assets- current liabilities = [cash+ accounts receivable+ inventory prepaid expenses] - [accounts payable +accrued expenses+ notes payable+ taxes payable]
(225,000+ 153,000+ 99,300+ 14, 500- (102,000+ 7.900+ 75,000+53,000) = 253,900
Operating working capital= short term assets – short term liabilities= (cash+ accounts receivable+ inventory) - (accounts payable +accrued expenses+ notes payable+ taxes payable)
=477,300- 237,900= 239,400
Debt ratio= current liabilities + long-term debts/ total assets= 571,900/ 1,123,800= 0.51
Income statement
 Income statement Sales 573,000Cost of goods sold     297,000Gross profit276,000Depreciation66,000General and administrative expenses79,000Interest expense4,750Prepaid expense($14,500)Accrued operating expenses7,900Taxes50,500Net income469,650Retained earnings262,900
Balance sheet
Cash225,000Accounts Receivable153,000Inventory99,300Prepaid expenses14,500Buildings and equipment895,000Accumulated depreciation ($263,000)Total1,123,800Accounts Payable102,000Accrued Expenses7,900Notes Payable75,000Taxes payable53,000Common Stock289,000Retained Earnings262,900Long-term Debt334,000Total liabilities and Equity1,123,800
4.6Ratio analysis
Current ratio = current assets / current liabilities = 3500/2000= 1.75               
Times interest earned = Net operating income/ interest expense =1,700/367=4.63              
Inventory turnover      = cost of goods sold/ inventory =3,300/1,000= 3.3              
Total asset turnover =net sales/ total sales =8,000/8,000=1 
Operating profit margin    = net operating income/ net sales=1,700/ 8,000= 0.21       
Operating return on assets= net operating income/ total assets= 1,700/ 8,000=0.21
Debt ratio = (current liabilities+ long term debt)/ total assets= 4,000+8,000=0.50
Average collection period= (account receivable *365)/ credit sales= (2,000*365)/ 8,000= 91.25
Fixed-asset turnover= net sales/ net fixed assets= 8,000/ 4,500=1.78
Return on equity= net income/ owner’s equity=800/ 4,000= 0.20
5.2a compound annuity
$ 500 year for 10 years compounded annually at 5 years
A = P (1 + r/n)nt = 500(1+0.05)10= 814
5.54] - present value
Since the cash flows are regular then
PV= Present value annuity factor * cash fl...