John Smith established an animal clinic (PetGo) on December 1, 2016, by purchasing all of its common
Question:
Prepare an income statement for 2016 (4 Points)
2. Prepare a balance sheet as of Dec 31, 2016 (5 Points)
3. Calculate PetGo's free cash flow for 2016 (2 Points)
4. Was PetGo successful during its first month of operation? Explain (2 Points)
5. PetGo was doing pretty well for 2017. During the year, PetGo sold $50,000 giftcard to customers and recorded $50,000 sales revenue. Was PetGo doing the correct accounting treatment? Explain (2 Points)
Common Stock
Common 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... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...
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