Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

AP3-3 Analyzing the Effects of Transactions by Using T-Accounts, Preparing a Statement of Earnings, and Evaluating the Total Asset Turnover Ratio and the Return on

image text in transcribed
image text in transcribed
AP3-3 Analyzing the Effects of Transactions by Using T-Accounts, Preparing a Statement of Earnings, and Evaluating the Total Asset Turnover Ratio and the Return on Assets as a Manager (CP3-3) L03-4,3-5,3-6 eXcel Alpine Stables Inc was established on April 1.2020. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April 2020 are provided for your review a Received contributions from five investors of $60,000 in cash ($12,000 each), a barn valued at $100,000, and land valued at $90,000 Each investor received 3,000 shares. b. Built a small barn for $62,000. The company paid half the amount in cash on April 1, 2020, and signed a three-year note payable for the balance c Provided animal care services to customers, all on credit, for $35,260 d. Rented stables to customers who cared for their own animals, and received cash payment of $13.200. e Received from a customer $2,400 to board her horse in April, May, and June (record as deferred revenue). Purchased hay and food supplies on account for $3,180 to be used in the summer $ Paid $1.240 in cash for water utilities expense incurred in the month Paid $2,700 on accounts payable for previous purchases, Received $10,000 from customers on accounts receivable Paid $6,000 in wages to employees who worked during the month. k Purchased a one-year insurance policy for $3,600 at the end of the month Received an electric utility bill for $1,800 for usage in April the bul will be paid in May. m. Paid $500 cash dividend to each of the investors at the end of the month UAB Required: 1. Set up appropriate T-accounts. All accounts begin with zero balances, 2 Record in the T-accounts the effects of each transaction for Alpine Stables in April, referencing euch transaction in the accounts with the transaction letter Show the ending balances in the Taccounts: 3. Prepare a statement of earnings for the year ended April 30, 2020, as well as a classified statement of financial position as at April 30. 2020 4. Write a short memo to the five owners, offering your opinion on the results of operations during the first month of business. 5. After three years in business, you are being evaluated for a promotion to chief financial officer. One measure is how efficiently you managed the assets of the business. The following data are available: 2022 2021 2020 Total assets $480,000 $320,000 $300,000 Total liabilities 125,000 28,000 30,000 Total shareholders' cquity 355,000 292,000 270,000 Total sales 450,000 400,000 360,000 Net earnings 50.000 30.000 (10.000) *At the end of 2022 Alpine Stables decided to build an Indoor riding area for living lessons year round. The company for intrations fonts from all of the base operational 203 Compute the total asset turnover ratio and the return on assets for 2021 and 2022 and evaluate the results. Do you think you should be promoted? Why Ignore interest on the long-term note related to (6)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Accounting For Payroll

Authors: Steven M. Bragg

1st Edition

0471251089, 9780471251088

More Books

Students also viewed these Accounting questions

Question

Illustrate the systems approach of family therapy.

Answered: 1 week ago

Question

What is meant by organisational theory ?

Answered: 1 week ago

Question

What is meant by decentralisation of authority ?

Answered: 1 week ago

Question

Briefly explain the qualities of an able supervisor

Answered: 1 week ago

Question

Define policy making?

Answered: 1 week ago

Question

Define co-ordination?

Answered: 1 week ago

Question

What would you do?

Answered: 1 week ago