Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After completing her first year of operations, Penny Cassidy used a number of ratios to evaluate the performance of Penny's Pool Service & Supply, Inc.

After completing her first year of operations, Penny Cassidy used a number of ratios to evaluate the performance of Penny's Pool Service & Supply, Inc. She was particularly interested in the effects of the following transactions from the last quarter:

A) Paid herself a dividend of $10,000 as the sole stockholder..

B)Recorded advance payments from customers of $2,000..

C)Paid the current months rent in cash, $500..

D)Purchased a new truck for $14,000 and signed a note payable for the whole amount. The truck was not placed in service until January 2015..

E)Recorded depreciation expense on office equipment of $600..

F) Accrued interest expense on the note payable to the bank was $400..

Complete the following table, select the sign of the effects of each transaction on the financial ratio listed. Use + for increase, and for decrease. (Select "NE" if there is no effect.)

Transaction Net Profit Margin Total Asset Turnover Return on Assets
A
B
C
D
E
F

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions