Question: Internet Marketing Inc IMI which has been operating for three

Internet Marketing Inc. (IMI), which has been operating for three years, provides marketing consulting services worldwide for online companies. You are a financial analyst assigned to report on the effectiveness of IMI’s management team at managing its assets. At the start of 2014 (its fourth year), IMI’s T- account balances were as follows. Amounts are in thousands of dollars.
Required
1. Using the data from these T- accounts, complete the accounting equation on January 1, 2014. Assets, \$ __________ = Liabilities, \$__________ + Shareholders’ Equity, \$ __________
2. Enter the following 2014 transactions in the T- accounts:
a. Provided \$ 58,000 in services to clients; received \$ 48,000 in cash and the rest on account.
b. Received \$ 5,600 cash from clients on account.
c. Received \$ 400 in cash as income on investments.
d. Paid \$ 36,000 for wages, \$ 12,000 for travel, \$ 7,600 in rent, and \$ 1,600 on trade payables.
e. Received \$ 1,600 in cash from clients in advance of services that IMI will provide next year.
f. Received a utility bill for \$ 800 for services used in 2014.
g. Paid \$ 480 in dividends to shareholders.
3. Compute ending balances in the T- accounts to determine the missing amounts on December 31, 2014: Revenues, \$ _____ – Expenses, \$ _____ = Net earnings, \$ _____ Assets, \$ _____ = Liabilities, \$ _____ + Shareholders’ Equity, \$ _____
4. Calculate the total asset turnover ratio for 2014. If the company had a total asset turnover ratio of 2.00 in 2013 and of 1.80 in 2012, what does your computation suggest to you about IMI? What would you state in your report?

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