XYZ Ltd. is a retail company that sells apparel. It started operations on January 1, 2022. The
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Question:
XYZ Ltd. is a retail company that sells apparel. It started operations on January 1, 2022. The following are the transactions for the year:
- Invested $200,000 cash in the company.
- Bought inventory worth $60,000 on credit from ABC Inc.
- Bought furniture and fixtures worth $30,000 by paying $10,000 cash and taking a loan of $20,000 from DEF Bank.
- Sold inventory worth $80,000 on credit.
- Paid $45,000 for operating expenses.
- Collected $60,000 from customers for the credit sales made in transaction 4.
- Paid $25,000 to ABC Inc. for the inventory purchased in transaction 2.
- Received a bill for $10,000 from XYZ Advertising for advertising services that were provided during the year.
- Paid interest of $2,000 on the loan taken in transaction 3.
Required:
a) Prepare the income statement, balance sheet, and statement of cash flows for the year ended December 31, 2022.
b) Calculate the current ratio and debt-to-equity ratio as of December 31, 2022.
Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
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