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Financial & Managerial Accounting
Found in: Page 94
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Question: Refer to Apple’s financial statements in Appendix A for the following questions.

Required

3. Compute its debt ratio for each of the fiscal years ended September 26, 2015, and September 27, 2014. (Report ratio in percent and round it to one decimal.)

Answer

September 2015 - 59%

September 2014 - 52%

See the step by step solution

Step by Step Solution

Step 1: Debt ratio

The debt ratio is the ratio between the total obligations of the business and the total resources owned by it. Thus, it is the ratio that computes the portion of resources or assets claimed by the external parties

 Step 2: Debt ratio (2015)

 Step 3: Debt ratio (2014)

Most popular questions for Business-studies Textbooks

Question: Aracel Engineering completed the following transactions in the month of June.

a. Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company in exchange for common stock.

b. The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a longterm note payable for $42,700.

c. The company purchased a portable building with $55,000 cash and moved it onto the land acquired in b.

d. The company paid $3,000 cash for the premium on an 18-month insurance policy.

e. The company completed and delivered a set of plans for a client and collected $6,200 cash.

f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.

g. The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.

h. The company purchased $1,150 of additional office equipment on credit.

i. The company completed engineering services for $22,000 on credit.

j. The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days.

k. The company collected $7,000 cash in partial payment from the client described in transaction g.

l. The company paid $1,200 cash for wages to a drafting assistant.

m. The company paid $1,150 cash to settle the account payable created in transaction h.

n. The company paid $925 cash for minor maintenance of its drafting equipment.

o. The company paid $9,480 cash in dividends.

p. The company paid $1,200 cash for wages to a drafting assistant.

q. The company paid $2,500 cash for advertisements on the web during June.

Required

3. Prepare a trial balance as of the end of June.

Nuncio Consulting completed the following transactions during June.

a. Armand Nuncio, the owner, invested $35,000 cash along with office equipment valued at $11,000 in the new company in exchange for common stock.

b. The company purchased land valued at $7,500 and a building valued at $40,000. The purchase is paid with $15,000 cash and a long-term note payable for $32,500.

c. The company purchased $500 of office supplies on credit.

d. Nuncio invested his personal automobile in the company in exchange for more common stock. The automobile has a value of $8,000 and is to be used exclusively in the business.

e. The company purchased $1,200 of additional office equipment on credit.

f. The company paid $1,000 cash salary to an assistant.

g. The company provided services to a client and collected $3,200 cash.

h. The company paid $540 cash for this month’s utilities.

i. The company paid $500 cash to settle the payable created in transaction c.

j. The company purchased $3,400 of new office equipment by paying $3,400 cash.

k. The company completed $4,200 of services for a client, who must pay within 30 days.

l. The company paid $1,000 cash salary to an assistant.

m. The company received $2,200 cash in partial payment on the receivable created in transaction k.

n. The company paid $1,100 cash in dividends.

Required

2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (108); Office Equipment (163); Automobiles (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); Common Stock (307); Dividends (319); Fees Earned (402); Salaries Expense (601); and Utilities Expense (602). Post the journal entries from part 1 to the ledger accounts and enter the balance after each posting.

  1. Question: (This serial problem started in Chapter 1 and continues through most of the chapters. If the Chapter 1 segment was not completed, the problem can begin at this point.)

SP 2 On October 1, 2017, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2017. The company’s initial chart of accounts follows.

Account No. Account No.

Cash ………………...................... 101 Common Stock ……………...... 307

Accounts Receivable ………….. 106 Dividends ………………………. 319

Computer Supplies …………….. 126 Computer Services Revenue ..403

Prepaid Insurance ……………….128 Wages Expense ………………. 623

Prepaid Rent ………………………131 Advertising Expense ………….655

Office Equipment ……………….. 163 Mileage Expense ……………… 676

Computer Equipment ……………167 Miscellaneous Expenses ……. 677

Accounts Payable ………………..201 Repairs Expense—Computer ..684

Required

1. Prepare journal entries to record each of the following transactions for Business Solutions.

Oct. 1 S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company in exchange for its common stock.

2 The company paid $3,300 cash for four months’ rent. (Hint: Debit Prepaid Rent for $3,300.)

3 The company purchased $1,420 of computer supplies on credit from Harris Office Products.

5 The company paid $2,220 cash for one year’s premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $2,220.)

6 The company billed Easy Leasing $4,800 for services performed in installing a new web server.

8 The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October 3.

10 The company hired Lyn Addie as a part-time assistant for $125 per day, as needed.

12 The company billed Easy Leasing another $1,400 for services performed.

15 The company received $4,800 cash from Easy Leasing as partial payment on its account.

17 The company paid $805 cash to repair computer equipment that was damaged when moving it.

20 The company paid $1,728 cash for advertisements published in the local newspaper.

22 The company received $1,400 cash from Easy Leasing on its account.

28 The company billed IFM Company $5,208 for services performed.

31 The company paid $875 cash for Lyn Addie’s wages for seven days’ work.

31 The company paid $3,600 cash in dividends.

Nov. 1 The company reimbursed S. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.32 per mile).

2 The company received $4,633 cash from Liu Corporation for computer services performed.

5 The company purchased computer supplies for $1,125 cash from Harris Office Products.

8 The company billed Gomez Co. $5,668 for services performed.

13 The company received notification from Alex’s Engineering Co. that Business Solutions’s bid of $3,950 for an upcoming project was accepted.

18 The company received $2,208 cash from IFM Company as partial payment of the October 28 bill.

22 The company donated $250 cash to the United Way in the company’s name.

24 The company completed work and sent a bill for $3,950 to Alex’s Engineering Co.

25 The company sent another bill to IFM Company for the past-due amount of $3,000.

28 The company reimbursed S. Rey in cash for business automobile mileage (1,200 miles at $0.32 per mile).

30 The company paid $1,750 cash for Lyn Addie’s wages for 14 days’ work.

30 The company paid $2,000 cash in dividends.

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