Info) You are the Chief Financial Officer and lead accountant for a small business you helped to start. The name of the business is Intermediate Accounting One, Inc. The business prepares it's financial statements as of the end of every year. The financial statements are being prepared for the year 2018. 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. Use the following Titles for sections of the Balance Sheet: Current Assets, Property, Plant & Equipment, Other Assets, Total Assets, Current Liabilities, Non-Current Liabilities, Total Liabilities, Total Stockholder's Equity, and Total Liabilities And Stockholder's Equity 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 Uncamed Revenues Notes Receivable (Current Portion) Wages Payable Inventory (Beginning) Accounts Payable Dividends Buildings (Historical value) Sales Rctums & Allowances Prepaid Insurance Taxes Payable (Current) Equipment (Historical Value) Retained Earings (Beginning) General & Administrative Expenses Supplies Notes Receivable (Long-Term Portion) $50,000 $305,000 $26,500 $110,000 $1,295,000 $445,000 $65,000 $1,444,000 $545,000 $35,000 $25,000 $93,000 $147,000 $65,000 $12,000 $995,000 $45,000 $3,000 $9,000 $725,000 $212,275 $305,000 $3,000 $337,000 $12,000 Other Information: 1) The company estimates that it the amount it will be unable to collect on it's accounts receivable will be (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: $145,000 $85,000 $118,000 1) Prepare a Condensed Income Statement assuming a Tax Rate of Also assume that the company sold a building for a gain of 30% $20,750 This gain was both unusual and infrequent. Intermediate Accounting One, Inc. Income Statement For the Year-Endod 12/31/2018 2) Prepare a Statement of Retained Earnings Intermediate Accounting One, Inc. Income Statement For the Year-Ended 12/31/2018 3) Prepare a Balance Sheet Intermediate Accounting One, Inc. Balance Sheet As Of 12/31/2018 ASSETS LIABILITIES STOCKHOLDER'S EQUITY art 2) After you have created the Balance Shect, please compute the following ratios: 1) What proportion (percentage of total assets is financed by owners? I 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: Answer Quick/Acid-Test Ratio: Answer Activity ratios: Accounts Receivable Tumover (Assume prior year A/R was the same as current year) Answer Inventory rumover. Answer Profitability ratios: Profit Margin on Sales: Answer Rctum on Asscts: (Assume that you do not have to average the assets, but can use 12/31/17 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 12/31/17 numbers) Answer 5) What information do the Liquity Ratios in particular tell you about the current conomic state of the company? Is this a company you would want to invest in? Why or why not? 6) Assume that Intermediate Accounting One, Inc. this is an accounting firm. Go online to search and compare these ratios to those of other accounting firms like EY, PWC, KPMG & Deloitte. How does Intermediate Accounting One, Inc. Compare to these firms? Would you still want to invest in this company? Why or why not? Part 3) After you have computed the ratios, answer the following questions: Give good detail in your answers because I want to see how you think 1) In what order is the Balance Sheet prepared when the General Financial Statements are being prepared? Why? 2) Describe how the Balance Sheet can be of use to Financial Statement Users. 3) Describe some of the limitations of the Balance Sheet 4) What types of accounts go on the Balance Sheet? Are they closed at the end of each year? Why or why not? Part 4) The CEO of Intermediate Accounting One, Inc has come to you and told you that he thinks the company's Net Income is too low. He has admitted that he doesn't know much about accounting, but he wants you to "switch from Double Declining Balance Depreciation to Straight-Line Depreciation because that will increase Net Income." 1) Are there any cthical issues with what the CEO wants to do? If so, explain. Ethics and ethical practices in Accounitng are extremely important. But why? Consider the work that Accountants do and explain why it is necessary that they act with integrity and truthfulness. Info) You are the Chief Financial Officer and lead accountant for a small business you helped to start. The name of the business is Intermediate Accounting One, Inc. The business prepares it's financial statements as of the end of every year. The financial statements are being prepared for the year 2018. 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. Use the following Titles for sections of the Balance Sheet: Current Assets, Property, Plant & Equipment, Other Assets, Total Assets, Current Liabilities, Non-Current Liabilities, Total Liabilities, Total Stockholder's Equity, and Total Liabilities And Stockholder's Equity 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 Uncamed Revenues Notes Receivable (Current Portion) Wages Payable Inventory (Beginning) Accounts Payable Dividends Buildings (Historical value) Sales Rctums & Allowances Prepaid Insurance Taxes Payable (Current) Equipment (Historical Value) Retained Earings (Beginning) General & Administrative Expenses Supplies Notes Receivable (Long-Term Portion) $50,000 $305,000 $26,500 $110,000 $1,295,000 $445,000 $65,000 $1,444,000 $545,000 $35,000 $25,000 $93,000 $147,000 $65,000 $12,000 $995,000 $45,000 $3,000 $9,000 $725,000 $212,275 $305,000 $3,000 $337,000 $12,000 Other Information: 1) The company estimates that it the amount it will be unable to collect on it's accounts receivable will be (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: $145,000 $85,000 $118,000 1) Prepare a Condensed Income Statement assuming a Tax Rate of Also assume that the company sold a building for a gain of 30% $20,750 This gain was both unusual and infrequent. Intermediate Accounting One, Inc. Income Statement For the Year-Endod 12/31/2018 2) Prepare a Statement of Retained Earnings Intermediate Accounting One, Inc. Income Statement For the Year-Ended 12/31/2018 3) Prepare a Balance Sheet Intermediate Accounting One, Inc. Balance Sheet As Of 12/31/2018 ASSETS LIABILITIES STOCKHOLDER'S EQUITY art 2) After you have created the Balance Shect, please compute the following ratios: 1) What proportion (percentage of total assets is financed by owners? I 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: Answer Quick/Acid-Test Ratio: Answer Activity ratios: Accounts Receivable Tumover (Assume prior year A/R was the same as current year) Answer Inventory rumover. Answer Profitability ratios: Profit Margin on Sales: Answer Rctum on Asscts: (Assume that you do not have to average the assets, but can use 12/31/17 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 12/31/17 numbers) Answer 5) What information do the Liquity Ratios in particular tell you about the current conomic state of the company? Is this a company you would want to invest in? Why or why not? 6) Assume that Intermediate Accounting One, Inc. this is an accounting firm. Go online to search and compare these ratios to those of other accounting firms like EY, PWC, KPMG & Deloitte. How does Intermediate Accounting One, Inc. Compare to these firms? Would you still want to invest in this company? Why or why not? Part 3) After you have computed the ratios, answer the following questions: Give good detail in your answers because I want to see how you think 1) In what order is the Balance Sheet prepared when the General Financial Statements are being prepared? Why? 2) Describe how the Balance Sheet can be of use to Financial Statement Users. 3) Describe some of the limitations of the Balance Sheet 4) What types of accounts go on the Balance Sheet? Are they closed at the end of each year? Why or why not? Part 4) The CEO of Intermediate Accounting One, Inc has come to you and told you that he thinks the company's Net Income is too low. He has admitted that he doesn't know much about accounting, but he wants you to "switch from Double Declining Balance Depreciation to Straight-Line Depreciation because that will increase Net Income." 1) Are there any cthical issues with what the CEO wants to do? If so, explain. Ethics and ethical practices in Accounitng are extremely important. But why? Consider the work that Accountants do and explain why it is necessary that they act with integrity and truthfulness