Generally Accepted Accounting Principles and Net Income
1. Arredondo, Inc. has current assets of $2,170, net fixed assets of $9300, current liabilities of $1350, and long-term debt of $3980. Building a balance sheet for this company, address the following questions:
a. What is the value of the shareholders’ equity account for this firm?
b. How much is net working capital? Arredondo,IncBalance Sheet | Assets Liabilities and Owener`s EquityCurrent assets $2,170 Current liabilities $1350Net fixed assets $9,300 Long-term debt $3980 Shareholders` equity $6140Total assets $11470 Total liabilities and shareholders` equity $11470 |
Net working capital= $2170-1350=$820
2. Lifeline, Inc. has sales of $585,000, costs of $273,000, depreciation expense of $71,000, interest expense of $38,000, and a tax rate of 35 percent. Building an income statement for this company, what is the net income? Lifeline, IncIncome Statement | Net sales $585,000 Cost $273,000-------------------------------------------------
Depreciation $71,000Earnings before interest and taxes $241,000-------------------------------------------------
Interest paid $38,000Taxable income $203000Taxes $71050Net income $131950 |
3. The SGS Co. had $275,000 in taxable income. Using the rates from Table 2.3 in the chapter, address the following: a. What is the company’s income taxes?
b. What is the company’s average tax rate?
c. What is the
a. What is the value of the shareholders’ equity account for this firm?
b. How much is net working capital? Arredondo,IncBalance Sheet | Assets Liabilities and Owener`s EquityCurrent assets $2,170 Current liabilities $1350Net fixed assets $9,300 Long-term debt $3980 Shareholders` equity $6140Total assets $11470 Total liabilities and shareholders` equity $11470 |
Net working capital= $2170-1350=$820
2. Lifeline, Inc. has sales of $585,000, costs of $273,000, depreciation expense of $71,000, interest expense of $38,000, and a tax rate of 35 percent. Building an income statement for this company, what is the net income? Lifeline, IncIncome Statement | Net sales $585,000 Cost $273,000-------------------------------------------------
Depreciation $71,000Earnings before interest and taxes $241,000-------------------------------------------------
Interest paid $38,000Taxable income $203000Taxes $71050Net income $131950 |
3. The SGS Co. had $275,000 in taxable income. Using the rates from Table 2.3 in the chapter, address the following: a. What is the company’s income taxes?
b. What is the company’s average tax rate?
c. What is the