acct557 week 7 home work solution
DESCRIPTION
Accounting ACCT 557 week 7 homework solutionTRANSCRIPT
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Segments Sales revenue Total expenses
Bottles $ 65,000.00 $ 26,000.00 $ 8,000.00 $ 34,000.00 $ 31,000.00 Containers $ 95,000.00 $ 62,000.00 $ 48,000.00 $ 110,000.00 $ (15,000.00)Dollhouses $ 620,000.00 $ 353,000.00 $ 140,000.00 $ 493,000.00 $ 127,000.00 Silverware $ 18,000.00 $ 8,000.00 $ 6,500.00 $ 14,500.00 $ 3,500.00 Total $ 798,000.00 $ 449,000.00 $ 202,500.00 $ 651,500.00 $ 161,500.00
Revenue Test:10% of $798,000 $ 79,800.00 Based on the revenue test Containers and Dollhouses are reportable since they both have revenue more than 10% of total revenue
Operating profit(loss) test:10% of $161,500 $ 16,150.00 Based on the Operating profit(loss) test Bottles and Dollhouses are reportable since they both have Operating profit(loss) more than 10% of total Operating profit(loss)
Identifiable asset test10% of $822,000 $ 82,200.00 Based on the Identifiable asset test Only Dollhouses are reportable since it has Identifiable asset more than 10% of total Identifiable asset
Cost of goods sold
Operating expenses
Operating profit (loss)
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$ 66,000.00 $ 80,000.00 $ 640,000.00 $ 36,000.00 $ 822,000.00
Based on the revenue test Containers and Dollhouses are reportable since they both have revenue more than 10% of total revenue
Based on the Operating profit(loss) test Bottles and Dollhouses are reportable since they both have Operating profit(loss) more than 10% of total Operating profit(loss)
Based on the Identifiable asset test Only Dollhouses are reportable since it has Identifiable asset more than 10% of total Identifiable asset
Identifiable assets
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Walrus Inc.Cash $ 60,000 Accounts receivable $ 170,000 Inventory $ 100,000 Plant assets (net) $ 582,000 Total assets $ 912,000
Accounts payable $ 110,000 Accrued taxes and expenses payable $ 42,000 Long-term debt $ 120,000 Common stock ($10 par) $ 260,000 Paid-in capital in excess of par $ 50,000 Retained earnings $ 330,000 Total equities $ 912,000
Net sales (all on credit) $ 2,000,000 Cost of goods sold $ 1,400,000 Net income $ 120,000
Compute the following:
(a) Current ratioCurrent Assets $ 330,000 Current Liabilities $ 152,000 Current ratio 2.17
(b) Inventory turnoverCost of goods sold $ 1,400,000 Inventory $ 100,000 Inventory turnover 14.00
(c) Receivables turnoverSales $ 2,000,000 Accounts receivable $ 170,000 Receivables turnover 11.76
(d) Book value per shareShareholder Equity $ 640,000 Shares Outstanding $ 26,000 Book value per share 24.62
(e) Earnings per shareNet Income $ 120,000 Shares Outstanding $ 26,000
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Earnings per share 4.62
(f) Debt to total assetsTotal Debt $ 272,000 Total Assets $ 912,000 Debt to total assets 0.30
(g) Profit margin on salesNet income $ 120,000 Net sales $ 2,000,000 Profit margin on sales 6%
(h) Return on common stock equityNet Income $ 170,000 Shareholder Equity $ 640,000 Return on common stock equity 0.27