Answer:
See explanation section.
Explanation:
December 31, Interest receivable Debit $198
Interest revenue Credit $198
Interest revenue = ($7,920 × 10% ÷ 12) × 3 = $198
<em>To record the adjusting entry for interest revenue.</em>
February 1, Cash Debit = $8,184
Note receivable Credit = $7,920
Interest revenue Credit = $66
Interest receivable Credit = $198
Calculation: Interest revenue = ($7,920 × 10% ÷ 12) × 4 = $264 - $198 = $66
<em>To record the cash received from note receivable with interest.</em>
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Answer:
Short-term creditors are most interested in liquidity ratios because they provide the best information on the cash flow of a company and measure its ability to pay its current liabilities or the money a company owes to its creditors.
Answer:
1. 0.07161
2. 2.43
3. 0.02932
Explanation:
1. The computation of the return on total assets is shown below:
Return on assets = (Net income) ÷ (average of total assets)
where,
Net income is $355
Average total assets = (Beginning total assets + ending total assets) ÷ 2
= ($4,090 + $5,825) ÷ 2
= $4,957.50
Now put these values to the above formula
So, the ratio would equal to
= $355 ÷ $4,957.50
= 0.07161
2. The computation of the assets turnover is shown below:
Total asset turnover = (Net Sales ÷ average of total assets)
= ($12,105 ÷ $4,957.50)
= 2.43
3. The computation of the profit margin is shown below:
= (Net earnings ÷ net sales) × 100
= ($355 ÷ $12,105) × 100
= 0.02932
Answer:
True
Explanation:
Financial statements are documents that reports and shows the financial standing of an organization . Financial statements are prepared by an organization to show the performance of the company been for a calculated any financially.
A Financial statement usually contains balance sheets, income statements, statements of cash flow, which are types of pilot
Financial statements communicates account information to interested parties as it help the involved parties to either invest more or not.
Cheers.