Avon Products, Inc., is a leading manufacturer and marketer of beauty products and related merchandise. The company
Question:
Its beginning and ending total assets were $7,874 and $7,735, respectively.
Required:1. Listed here are hypothetical additional transactions. Assuming that they also occurred during the fiscal year, complete the following tabulation, indicating the sign of the effect of each additional transaction (+ for increase, - for decrease. and NE for no effect). Consider each item independently and ignore taxes.
a. Recorded and received additional interest income of $7.
b. Purchased $80 of additional inventory on open account.
c. Recorded and paid additional advertising expense of $16.
d. Issued additional shares of common stock for $44) cash.
2. Assume that next period, Avon does not pay any dividends, does not issue or retire stock, and earns 20 percent more than during the current period. If total assets increase by 5 percent, will Avons ROA next period be higher, lower, or the same as in the current period?Why
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short