Scenario #1: Financial statements and ratios
Here is the list of accounts of Extase Inc. as at September 30, 2012:
|Accumulated Depreciation – trucks and equipment||$31,000|
|Fringe benefits payable||5,400|
|Cost of sales||161,600|
|Share capital as at October 1, 2011||200,000|
|Accumulated amortization – building||63,000|
|Retained earnings as at October 1, 2011||92,800|
|Trucks and equipment||182,500|
- Prepare an Income Statement, a Balance Sheet and a Statement of Stockholders’ Equity as of September 30, 2012.
- Calculate the following performance ratios within one decimal place. (Show your formula and calculations).
- Return on Assets
- Return on Equity
- Current Ratio
- Average Collection Period
- Net profit Margin
Scenario #2: Bank reconciliation
You are given the following information about the Lamontagne Health Centre.
|Balance as at July 1||6,540||6,540|
|Interest deposited directly into the account||900|
|Minus: July cheques|
|NSF cheque from a client||235|
Balance as at July 31
Prepare the July bank reconciliation. Use an Excel spreadsheet to prepare the statement.
Scenario #3: Operating expenses
For each of the following cases, state whether an operating expense should be recognized, in what amount and during which period.
- On November 30, 2012, the company paid $5,000 to publish ten ads. During the period ended December 31, 2012, only five ads were published.
- The costs of a strike that took place in 2012 were $75,000.
- A semi-trailer, purchased at the beginning of the year and costing $135,000, travelled 320,000 kilometers in 2012. The company usually gets rid of its semi-trailers after they travel 1,600,000 kilometers.
- The company paid $499,700 in wages to its employees in 2012.
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