The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information: Total Inc. Income Statement Year Ended December 31,
The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information: Total Inc. Income Statement Year Ended December 31, 20X6
Sale | $50,000 |
Cost of goods sold | $30,000 |
Gross Profit | $20,000 |
Operating Expenses | $15,000 |
Profit from Operations | $5,000 |
Income Tax Expense | $3,000 |
Profit | $2,000 |
Total Inc. comparative balance sheet at December 31
20X6 | 20X5 | |
Cash | $1,200 | $1,000 |
Accounts Receivable | $300 | $1,500 |
Inventory | $5,000 | $3,000 |
Equipment | $12,000 | $8,000 |
Accumulated Depreciation - equipment | $(4,000) | $(2,000) |
Total Assets | $14,500 | $11,500 |
Account Payable | $1,000 | $3,500 |
Long-term Notes Payable | $2,000 | $- |
Common shares | $10,000 | $8,000 |
Retained Earnings | $1,500 | $- |
Total Liabilities & Shareholders' Equity | $14,500 | $11,500 |
Additional Information: 1. Operating expenses include depreciation expense of $2,500 2. Accounts Payable related to the purchase of inventory 3. Equipment that cost $2,000 was sold for $1,500 cash 4. New equipment was purchased during the year for $5,000 5. Common shares were sold for $2,000 cash Round answers to fit 2 decimal places in all questions (in % questions a 0.12 is presented as 12%, so a 0.124 is rounded as 12% and 0.127 is rounded as 13%)
The equity ratio at December 20X5 was:
Between 0.62 and 1.67
Equal or above 1.68
Equal or below 0.40
Not enough data provided to calculate it
Between 0.41 and 0.61
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started