Compute the following ratios and measurements for 2020:1. Cash flow from Operations to Current Liabilities2. Rate of Return on invested capital3. Cash flow from Operations to Total Liabilities Sound Break CorporationBALANCE SHEETDecember 31, 2019 and 2020ASSETS20192020Current Assets:P 85,000P 75,00025,000CashMarketable Securities25,000Trade Receivables, netInventory, at costPrepaid Expenses185,000245,000250,00015,000P550,000220,00010,000P585,000Total Current AssetsProperty and Other Assets:Equipment, netP340,000P320,000Other Assets15,00015,000Total Property and Other AssetsP355,000P335,000Total AssetsP905,000P920,000LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent Liabilities:Trade PayablesAccrued ExpensesP185,000P165,00020,00025,000Other Current Liabilities10,000P215,00010,000P200,000Total Current LiabilitiesLong-Term LiabilityMortgage PayableP120,000P120,000Stockholders' EquityCapital Stock, P100 parAdditional Paid-In CapitalRetained Earnings AppropriatedRetained Earnings UnappropriatedP300,000P300,00030,00030,00080,00080,000160,000190,000Total Stockholders' EquityP570,000P600,000Total Liabilities and Stockholders' EquityP905,000P920,000 Sound Break CorporationIncome and Retained Earnings StatementFor the year Ended December 31, 2020Net SalesP1,000,000Cost of Goods Sold:Inventory, Dec. 31, 2019P250,000Purchases720,000Total Goods AvailableP970,000Inventory220,000750,000Gross Margin on SalesP 250,000Selling and Administrative (includingDepreciation of P20,000)125,000Net Income before TaxP 125,000Provision for Income Tax35,000Net Income for the Year90,000Retained Earnings, beginning130,000P 220,00030,000P 190,000TotalDividends PaidRetained Earnings, December 31, 2020

Financial analysis refers to the analysis of the financial statements by its users for making…

Answered: Compute the following ratios and…

Compute the following ratios and measurements for 2020: 1. Cash flow from Operations to Current Liabilities 2. Rate of Return on invested capital 3. Cash flow from Operations to Total Liabilities

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....

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Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
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