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The following adjustments were provided 1 . Fees of $50,000, received in advance during the year were erroneously recorded in Sales revenue. 2. $100,000 recorded
The following adjustments were provided 1 . Fees of $50,000, received in advance during the year were erroneously recorded in Sales revenue. 2. $100,000 recorded as unearned service was earned during the year 3. Prepaid Insurance expired during the year $100,000. (Admin Expense) 4. Equipment is expected to last for 5 years. Salvage value is $200,000 5. Office salaries and wages earned but unrecorded and unpaid December 31, 202115, \$50,000. (Admin Expense) 6. A physical count of inventory on 12/31/202115 shows that $100,000 worth is remaining. 7. Provide a bad debt allowance of $100,000 8 . Provide income taxes of 20% of income before taxes 9. Dividends of 100,000 was declared (but not paid) for the year. C. For JKF, compute the following ratios (use the definitions provided in the exam). 1. Operating Margin (Operating Income / Net Sales Revenue) 2. Sales Margin (Net Income / Net Sales Revenue) 3. Working Capital (Current Assets - Current Liabilities) 4. Current Ratio (Current Assets / Current Liabilities) 5. Quick Ratio ([Cash + Sht Term Inc + A/c Receivables] / Current Liabilities) 6. Debt to Equity ratio (Total Liabilities / Total Stockholders Equity) 7. Leverage (Total Liabilities / Total Assets) 8. ROA (NI / Tot Assets) D. Comment on the health of the firm based on the ratios you computed above (1 paragraph. This mav be typed)
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