The MBA802 Company failed to record (accrue) $9,000,000 of cost related to vendor invoices and warranty...
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The MBA802 Company failed to record (accrue) $9,000,000 of cost related to vendor invoices and warranty liability at year-end. With this omission, the company's summary financial statements were stated as follows: Summarized Income Statement Sales $97,000,000 All Cost (incl. Interest & Taxes) S83 000 000 Net Income $14,000,000 Summarized Balance Sheet This Year Last Year Assets: All Current Assets combined $74,000,000 $68,000.000 All Long-Term Assets combined $61.000 000 $59 000 000 Total Assets: $135,000,000 $127,000,000 Liabilities & Stockholders Equity All Current Liabilities combined $61,000,000 $57,000,000 All Long-Term Liabilities combined $35,000,000 $45,000,000 Stockholders Equity $39.000 000 $25 000 000 Total Liabilities & Equity $100,000,000 $80.000,000 Answer the following questions: Current Ratio per Company Statements? Current Ratio if Statements Fixed This Error? Would the Current Ratio Be Better or Worse? ROl per Company Statements? ROI if Statements Fixed This Error? Would the ROI be Better or Worse? ROE per Company Statements? ROE if Statements Fixed This Error? Would the ROE be Better or Worse? The MBA802 Company failed to record (accrue) $9,000,000 of cost related to vendor invoices and warranty liability at year-end. With this omission, the company's summary financial statements were stated as follows: Summarized Income Statement Sales $97,000,000 All Cost (incl. Interest & Taxes) S83 000 000 Net Income $14,000,000 Summarized Balance Sheet This Year Last Year Assets: All Current Assets combined $74,000,000 $68,000.000 All Long-Term Assets combined $61.000 000 $59 000 000 Total Assets: $135,000,000 $127,000,000 Liabilities & Stockholders Equity All Current Liabilities combined $61,000,000 $57,000,000 All Long-Term Liabilities combined $35,000,000 $45,000,000 Stockholders Equity $39.000 000 $25 000 000 Total Liabilities & Equity $100,000,000 $80.000,000 Answer the following questions: Current Ratio per Company Statements? Current Ratio if Statements Fixed This Error? Would the Current Ratio Be Better or Worse? ROl per Company Statements? ROI if Statements Fixed This Error? Would the ROI be Better or Worse? ROE per Company Statements? ROE if Statements Fixed This Error? Would the ROE be Better or Worse?
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1For current ratio Current Ratio Current Assets Current Liabilities 74000000 61000000 Current ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Posted Date:
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