Question
Transactions during 2023 follow. All dollars are in millions, except per share amounts: Borrowed $15 cash on a 5-year, 8 percent note payable, dated March
Transactions during 2023 follow. All dollars are in millions, except per share amounts:
Borrowed $15 cash on a 5-year, 8 percent note payable, dated March 1, 2023.
Sold 4 million additional shares of common stock for cash at $1 market value per share on January 1, 2023.
Purchased land for a future building site; paid cash, $13.
Earned $215 in revenues for 2023, including $53 on credit and the rest in cash.
Incurred $89 in wages expense and $25 in miscellaneous expenses for 2023, with $20 on credit and the rest paid in cash.
Collected accounts receivable, $34.
Purchased other noncurrent assets, $15 cash.
Purchased supplies on account for future use, $27.
Paid accounts payable, $26.
Declared cash dividends on December 1, $25.
Signed a three-year $33 service contract to start February 1, 2024.
Paid the dividends in (j) on December 31.
Data for adjusting entries (amounts in millions):
Supplies counted on December 31, 2023, $18.
Depreciation for the year on the equipment, $10.
Interest accrued on notes payable (to be computed).
Wages earned by employees since the December 24 payroll but not yet paid, $16.
Income tax expense, $11, payable in 2024.
Required:
Identify the type of transaction for (a) through (l) for the statement of cash flows (O for operating, I for investing, F for financing) and the direction and amount of the effect
Compute the following ratios (rounded to two decimal places) for 2023 and explain what the results suggest about the company:
Current ratio
Total asset turnover
Net profit margin
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