Problem 6 (20 points) You have learned how to analyze a transaction (event). Each transaction affects...
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Problem 6 (20 points) You have learned how to analyze a transaction (event). Each transaction affects financial statement items and thus financial ratios. Since financial ratios affect how a firm does its business, it is important to understand how an event affects ratios. Apple incurred an additional $2,500 in research and development expense paid for in cash. Assume that net income was $68,000 and sales was $205,000 before the transaction. What would be the effect on the net profit margin ratio? Journalize the transaction. In addition, calculate net profit margin before the transaction and net profit margin after the transaction. Problem 6 (20 points) 1) Journal entry of the transaction - Enter an account name following debit (Dr.) and credit (Cr.), and enter dollar amounts in the table below. Dr. 2$ Cr. 2) The financial ratio before the transaction = Explain your calculation in the table below. Numerator = Denominator = 3) The financial ratio after the transaction = Explain your calculation in the table below. Numerator = Denominator = Include here if you want to further explain your work (optional): Problem 6 (20 points) You have learned how to analyze a transaction (event). Each transaction affects financial statement items and thus financial ratios. Since financial ratios affect how a firm does its business, it is important to understand how an event affects ratios. Apple incurred an additional $2,500 in research and development expense paid for in cash. Assume that net income was $68,000 and sales was $205,000 before the transaction. What would be the effect on the net profit margin ratio? Journalize the transaction. In addition, calculate net profit margin before the transaction and net profit margin after the transaction. Problem 6 (20 points) 1) Journal entry of the transaction - Enter an account name following debit (Dr.) and credit (Cr.), and enter dollar amounts in the table below. Dr. 2$ Cr. 2) The financial ratio before the transaction = Explain your calculation in the table below. Numerator = Denominator = 3) The financial ratio after the transaction = Explain your calculation in the table below. Numerator = Denominator = Include here if you want to further explain your work (optional):
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Related Book For
Discovering Advanced Algebra An Investigative Approach
ISBN: 978-1559539845
1st edition
Authors: Jerald Murdock, Ellen Kamischke, Eric Kamischke
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