Info) You are the Chief Financial Officer and lead accountant for a small business you helped to start. The name of the business is Majestic Materials, Inc. The business prepares it's financial statements as of the end of every year. The financial statements are being prepared for the year 2020. Part 1) Prepare the first three Financial Statements using the Account Names and Account Balances listed below. (You will need more account names than are listed) Account balances are as of the end of the year unless specified. In the Financial Statements, where you see a box to the left, type an Account Name. Where you see a box to the right, type either an Account Balance or compute a Total Amount. Account Names Account Balances Selling Expenses Common Stock Cash Notes Payable (Current Portion) Sales Revenues Land Accounts Receivable Notes Payable (Long-Term Portion) Purchases Unearned Revenues Notes Receivable (Current Portion) Wages Payable Inventory (Begi Accounts Payable Dividends Buildings (Historical value) Sales Returns & Allowances Prepaid Insurance $57,000 $312,000 $33,500 $117,000 $1,302,000 $452,000 $72,000 $1,451,000 $552,000 $42.000 $32,000 $101,000 $154,000 $72,000 $19,000 $1,002,000 $52,000 $10,000 nfo) You are the Chief Financial Officer and lead accountant for a small business you helped to start The name of the business is Majestic Materials, Inc. The business prepares it's financial statements as of the end of every year. The financial statements are being prepared for the year 2020. t1) Prepare the first three Financial Statements using the Account Names and Account Balances listed below. (You will need more account names than are listed) Account balances are as of the end of the year unless specified. In the Financial Statements, where you see a box to the left, type an Account Name. Where you see a box to the right, type either an Account Balance or compute a Total Amount. Account Names Account Balances Selling Expenses Common Stock Cash Notes Payable (Current Portion) Sales Revenues Land Accounts Receivable Notes Payable (Long-Term Portion) Purchases Unearned Revenues Notes Receivable (Current Portion) Wages Payable Inventory (Beginning) Accounts Payable Dividends Buildings (Historical value) Sales Returns & Allowances Prepaid Insurance Taxes Payable (Current) Equipment (Historical Value) Retained Earnings (Beginning) General & Administrative Expenses Supplies Notes Receivable (Long-Term Portion) $57,000 $312,000 $33,500 $117,000 $1,302,000 $452,000 $72,000 $1,451,000 $552,000 $42,000 $32,000 $101,000 $154,000 $72,000 $19,000 $1,002,000 $52,000 $10,000 $16,000 $732,000 $190,677.50 $302,000 $10,000 $344,000 Other Information: 1) The company estimates that it the amount it will be unable to collect on it's accounts receivable will be: $19,000 Assume that the expense component of this amount is already included in Selling Expenses) 2) The company depreciates all Fixed Assets on a Double-Declining Balance basis The company has of accumulated depreciation on it's building of: and accumulated depreciation on it's equipment of: (Assume that the expense components of these amounts are already included in General & Adminsitrative Expenses) 3) The company keeps record of it's inventory using a periodic system The company perfomed a physical inventory count at the end of the year and determined that it's value was: $152,000 $92,000 $125,000 1) Prepare a Condensed Income Statement assuming a Tax Rate of Also assume that the company sold a building for a gain of 21% $27,750 This gain was both unusual and infrequent. Majestic Materials, Inc. Income Statement For the Year-Ended 12/31/2020 Sales Revenue Sales Returns & Allowances Net Sales Cost of Goods Sold Gross Profit Selling Expenses General & Administrative Expenses Operating Income Other Revenues & Gains Income Before Taxes Income Taxes Net Income 2) Prepare a Statement of Retained Earnings 2) Prepare a Statement of Retained Earnings Majestic Materials, Inc. Income Statement For the Year-Ended 12/31/2020 Retained Earnings (Beginning) $154,000 Net Income 552000 Dividends 19000 Net Increase in Retained Earnings Retained Earnings (Ending) 3) Prepare a Balance Sheet Majestic Materials, Inc. Balance Sheet As Of 12/31/2020 ASSETS LIABILITIES Current Assets Current Liabilites Cash Accounts Receivable Less: Allowance For Doubtful Accounts Notes Receivable (Current Portion) Inventory Prepaid Insurance Supplies Total Current Assets 33500 $72,000 $19,000 32000 125000 10000 10000 Accounts Payable Unearned Revenue Wages Payable Taxes Payable (Current) Notes Payable (Current Portion) Total Current Liabilites $72,000 $117,000 $42,000 $101.000 $16,000 $348,000 $263,500 Non-Current Liabilites Property, Plant & Equipment Notes Payable (Long-Term Portion) Total Non-Current Liabilities $348,000 $1,451,000 Buildings Accumulated Depreciation - Buildings Equipment Accumulated Depreciation - Equipment $1,002,000 $152.000 $732,000 $732,000 Total Liabilities $1,799,000 Land 92000 2286000 Total Property, Plant & Equipment STOCKHOLDER'S EQUITY Common Stock Retained Earnings $312.000 $4,385,000 Other Assets Non Receivable (Long-Term Portion) $344,000 Total Liabilities And Stockholder's Equity $750,500 Total Assets $2.549.500 Total Liabilities And Stockholder's Equity $2,549,500 Part 2) After you have created the Balance Sheet, please compute the following ratios: 1) What proportion (percentage) of total assets is financed by owners? Answer 2) What proportion (percentage) of total assets is financed by nonowners? Answer 3) How much working capital does the company have for the year presented? Answer 4) Liquidity ratios: Current Ratio: Answ Quick/Acid-Test Ratio: Answer Activity ratios: Accounts Receivable Turnover: (Assume prior year A/R was the same as current year) Answer Inventory Turnover: Answer Profitability ratios: Profit Margin on Sales: Answer Return on Assets: (Assume that you do not have to average the assets, but can use 12/31/19 numbers) Answer Return on Common Stockholders Equity: (Assume all dividends paid were to common stockholders and there were no preferred dividends. Also assume that you do not have to average the common stockholder's equity, but can use 12/31/19 numbers) Answer 5) What information do the Liquity Ratios in particular tell you about the current economic state of the company? Is this a company you would want to invest in? Why or why not? Info) You are the Chief Financial Officer and lead accountant for a small business you helped to start. The name of the business is Majestic Materials, Inc. The business prepares it's financial statements as of the end of every year. The financial statements are being prepared for the year 2020. Part 1) Prepare the first three Financial Statements using the Account Names and Account Balances listed below. (You will need more account names than are listed) Account balances are as of the end of the year unless specified. In the Financial Statements, where you see a box to the left, type an Account Name. Where you see a box to the right, type either an Account Balance or compute a Total Amount. Account Names Account Balances Selling Expenses Common Stock Cash Notes Payable (Current Portion) Sales Revenues Land Accounts Receivable Notes Payable (Long-Term Portion) Purchases Unearned Revenues Notes Receivable (Current Portion) Wages Payable Inventory (Begi Accounts Payable Dividends Buildings (Historical value) Sales Returns & Allowances Prepaid Insurance $57,000 $312,000 $33,500 $117,000 $1,302,000 $452,000 $72,000 $1,451,000 $552,000 $42.000 $32,000 $101,000 $154,000 $72,000 $19,000 $1,002,000 $52,000 $10,000 nfo) You are the Chief Financial Officer and lead accountant for a small business you helped to start The name of the business is Majestic Materials, Inc. The business prepares it's financial statements as of the end of every year. The financial statements are being prepared for the year 2020. t1) Prepare the first three Financial Statements using the Account Names and Account Balances listed below. (You will need more account names than are listed) Account balances are as of the end of the year unless specified. In the Financial Statements, where you see a box to the left, type an Account Name. Where you see a box to the right, type either an Account Balance or compute a Total Amount. Account Names Account Balances Selling Expenses Common Stock Cash Notes Payable (Current Portion) Sales Revenues Land Accounts Receivable Notes Payable (Long-Term Portion) Purchases Unearned Revenues Notes Receivable (Current Portion) Wages Payable Inventory (Beginning) Accounts Payable Dividends Buildings (Historical value) Sales Returns & Allowances Prepaid Insurance Taxes Payable (Current) Equipment (Historical Value) Retained Earnings (Beginning) General & Administrative Expenses Supplies Notes Receivable (Long-Term Portion) $57,000 $312,000 $33,500 $117,000 $1,302,000 $452,000 $72,000 $1,451,000 $552,000 $42,000 $32,000 $101,000 $154,000 $72,000 $19,000 $1,002,000 $52,000 $10,000 $16,000 $732,000 $190,677.50 $302,000 $10,000 $344,000 Other Information: 1) The company estimates that it the amount it will be unable to collect on it's accounts receivable will be: $19,000 Assume that the expense component of this amount is already included in Selling Expenses) 2) The company depreciates all Fixed Assets on a Double-Declining Balance basis The company has of accumulated depreciation on it's building of: and accumulated depreciation on it's equipment of: (Assume that the expense components of these amounts are already included in General & Adminsitrative Expenses) 3) The company keeps record of it's inventory using a periodic system The company perfomed a physical inventory count at the end of the year and determined that it's value was: $152,000 $92,000 $125,000 1) Prepare a Condensed Income Statement assuming a Tax Rate of Also assume that the company sold a building for a gain of 21% $27,750 This gain was both unusual and infrequent. Majestic Materials, Inc. Income Statement For the Year-Ended 12/31/2020 Sales Revenue Sales Returns & Allowances Net Sales Cost of Goods Sold Gross Profit Selling Expenses General & Administrative Expenses Operating Income Other Revenues & Gains Income Before Taxes Income Taxes Net Income 2) Prepare a Statement of Retained Earnings 2) Prepare a Statement of Retained Earnings Majestic Materials, Inc. Income Statement For the Year-Ended 12/31/2020 Retained Earnings (Beginning) $154,000 Net Income 552000 Dividends 19000 Net Increase in Retained Earnings Retained Earnings (Ending) 3) Prepare a Balance Sheet Majestic Materials, Inc. Balance Sheet As Of 12/31/2020 ASSETS LIABILITIES Current Assets Current Liabilites Cash Accounts Receivable Less: Allowance For Doubtful Accounts Notes Receivable (Current Portion) Inventory Prepaid Insurance Supplies Total Current Assets 33500 $72,000 $19,000 32000 125000 10000 10000 Accounts Payable Unearned Revenue Wages Payable Taxes Payable (Current) Notes Payable (Current Portion) Total Current Liabilites $72,000 $117,000 $42,000 $101.000 $16,000 $348,000 $263,500 Non-Current Liabilites Property, Plant & Equipment Notes Payable (Long-Term Portion) Total Non-Current Liabilities $348,000 $1,451,000 Buildings Accumulated Depreciation - Buildings Equipment Accumulated Depreciation - Equipment $1,002,000 $152.000 $732,000 $732,000 Total Liabilities $1,799,000 Land 92000 2286000 Total Property, Plant & Equipment STOCKHOLDER'S EQUITY Common Stock Retained Earnings $312.000 $4,385,000 Other Assets Non Receivable (Long-Term Portion) $344,000 Total Liabilities And Stockholder's Equity $750,500 Total Assets $2.549.500 Total Liabilities And Stockholder's Equity $2,549,500 Part 2) After you have created the Balance Sheet, please compute the following ratios: 1) What proportion (percentage) of total assets is financed by owners? Answer 2) What proportion (percentage) of total assets is financed by nonowners? Answer 3) How much working capital does the company have for the year presented? Answer 4) Liquidity ratios: Current Ratio: Answ Quick/Acid-Test Ratio: Answer Activity ratios: Accounts Receivable Turnover: (Assume prior year A/R was the same as current year) Answer Inventory Turnover: Answer Profitability ratios: Profit Margin on Sales: Answer Return on Assets: (Assume that you do not have to average the assets, but can use 12/31/19 numbers) Answer Return on Common Stockholders Equity: (Assume all dividends paid were to common stockholders and there were no preferred dividends. Also assume that you do not have to average the common stockholder's equity, but can use 12/31/19 numbers) Answer 5) What information do the Liquity Ratios in particular tell you about the current economic state of the company? Is this a company you would want to invest in? Why or why not