Using Be Prepared, Inc.’s adjusted trial balance and prior period’s balance sheet, prepare the following Financial Reports:
Multi-Step Income Statement for the month of January 2020 (see page 180/181 in your textbook for guidance). Check figure: $1,312 net income.
Statement of Retained Earnings for the month of January 2020 (see page 479/480 in your textbook for guidance). Note: There are no prior period adjustments and all dividends declared are cash dividends in the amount of $31,060.
Comparative Balance Sheet for the months of December 2019 and January 2020 (See page 617/618 in your textbook for guidance). Check figure: Total liabilities $1,013,378 (2020).
Common–Size Comparative Balance Sheet for the months of December 2019 and January 2020 (See page 619 in your textbook for guidance).
Use the Income Statement and Comparative Balance Sheet you prepared in Required #1 and the following additional information to prepare the Statement of Cash Flows (Indirect Method) for the month of January 2020 (see page 581 for an example).
Check figure: net cash provided by operating activities $55,050.
Issued 10,000 new shares of common stock in exchange for a piece of land. The stock was selling on the market at an average price of $10 per share on the date of sale and the par value of the stock was 50 cents.
Purchased land with a cost $250,000. A down payment was made in the amount of $50,000 cash and a 10% 5-year note payable was signed for the difference.
Purchased additional store equipment for $50,000 paying cash.
The $10,000 notes receivable was related to the sale of merchandise inventory to a credit customer this period. Hint: The increase in notes receivable should be reported as an addition to the operating activities section of the statement of cash flows.
Issued bonds with a face amount of $800,000 at 97. Hint: The amortization of the bond discount in the amount of $100 should be reported as an addition to the operating activities section.
Used the cash proceeds from the bond issue to pay off the mortgage payable of $200,000.
The company repurchased 20,000 shares of its common stock on the open market for $9 per share.
The company reissued 9,125 of the treasury shares at a price of $20 per share.
Issued 1,500 shares of preferred stock at $105 per share.
Paid cash dividends of $31,060 to preferred and common stockholders.
Prepare the following Ratios
for January 2020 and include formula and calculation:
1. Current Ratio
2. Acid-Test Ratio
3. Working Capital
4. Days’ sales in inventory
5. Day’s sales uncollected
6. Debt Ratio
7. Equity Ratio
9. Profit Margin Ratio
10. Gross Margin Ratio
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