TitleBUS-FP3061 – Fundamentals of AccountingRatioYear .docx

TitleBUS-FP3061 – Fundamentals of Accounting
Ratio
Year 1
Year 2
Current ratio
3.12:1
2.96:1
Quick ratio
1.34:1
1.02:1
Receivables turnover
9.7 times
10.2 times
Inventory turnover
2.4 times
2.3 times
Profit margin
11.4%
12.6%
Asset turnover
1.21 times
1.22 times
Return on assets
13.7%
15.4%
Return on equity
28.5%
29.3%
Price-earnings ratio
10.4 times

12.4 times
Debt ratio
50.2%
45.3%
Times interest earned
9.6 times
13.0 times
Capella Proprietary and Confidential
ShortDoc_Internal.doc
Last updated: 8/28/2017 3:04 PM
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Ratio AnalysisBUS-FP3061 - Fundamentals of
AccountingAssessment 5, Part 1 Template2013
Calculations2013 AnswersCurrent ratioQuick ratioReceivables
turnoverInventory turnoverProfit marginAsset turnoverReturn
on assetsReturn on equityEarnings per sharePrice-earningsCash
Dividend payoutDebt ratioDebt-to-EquityTimes interest earned
Financial StatementsBUS-FP3061 - Fundamentals of
AccountingAssessment 5, Part 1 TemplateOrange
CompanyOrange CompanyIncome StatementBalance SheetsFor
the Years Ended December 31December
312013201220132012Net sales (all on account)$ 600,000$
520,000AssetsExpenses:Current AssetsCost of Goods Sold$
415,000$ 354,000Cash$ 21,000$ 18,000Selling and
administrative$ 120,800$ 114,600Short-term investments$
18,000$ 15,000Interest Expense$ 7,800$ 6,000Accounts
Receivable$ 86,000$ 74,000Income Tax Expense$ 18,000$
14,000Inventory$ 90,000$ 70,000Total expenses$ 561,600$
488,600Total Current Assets$ 215,000$ 177,000Net Income$
38,400$ 31,400Plant Assets$ 423,000$ 383,000Total

Assets$ 638,000$ 560,000Additional Data:1. The common
stock recently sold at $19.50 per share.Liabilities and
Stockholder's Equity2. Cash dividends in the amount of $15,400
were paid-out in 2013.Current LiabilitiesAccounts Payable$
122,000$ 110,000Income Taxes Payable$ 23,000$
20,000Total Curent Liabilities$ 145,000$ 130,000Long-term
LiabilitiesBonds Payable$ 120,000$ 80,000Total Liabilities$
265,000$ 210,000Stockholder's EquityCommon Stock ($5 par
value)$ 150,000$ 150,000Retained Earnings$ 223,000$
200,000Total Stockholder's Equity$ 373,000$ 350,000Total
Liabilities and Stockholder's Equity$ 638,000$ 560,000
TemplateBUS-FP3061 Fundamentals of Accounting
Instructions
Please leave an empty row at the end of each transaction before
continuing on to the next one.
Trans. #
Accounts
Debit
Credit

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2

TitleBUS-FP3061 Fundamentals of Accounting
1. Define the internal and external users of accounting data.
What data would each group most likely want to review?
Provide examples of each user type.
2. Describe the role ethics plays in the operation of an
accounting system. Include a couple of examples.
3. Select three among the several accounting conventions
prescribed by law, regulators, and accounting organizations. For
each selection, describe its purpose and provide an example of
how it would be applied to an accounting system.
4. Describe each of the three main financial statements—the end
products of the work that takes place in an accounting system
over a period of time—studied in the course. What does each
statement present? Why is it important to prepare these? Who
uses the information in the statements? Describe the
interrelationship among the three statements.
5. Discuss the rules of debit and credit as apply to each of the
account types that would appear on a company's balance sheet
and income statement. Identify the normal balance for each
account type and provide an example event for each. Analyzing
business events requires the accountant to make several
judgments about the facts contained in the event.
1

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TemplateBUS-FP3061 – Fundamentals of Accounting
Instructions
Accounts to be used:
· Cash.
· Prepaid insurance.
· Land.
· Buildings.
· Equipment.
· Accounts payable.
· Unearned service revenue.
· Owner's capital.
· Owner's drawings.
· Service revenue.
· Advertising expense.
· Salaries and wages expense.

Leave a space between each dated transaction.
May 1
Invested $20,000 cash in the golf course business.
May 3
Purchased Hampstead Golf Land for $15,000 cash. The price
includes land $12,000, shed $2,000, and equipment $1,000.
May 5
Paid advertising expenses of $700.
May 6
Paid cash $600 for a one-year insurance policy.
May 10
Purchased golf discs and other equipment for $1,050 from Discs
Are Us, payable in 30 days.
May 18
Received $1,100 in cash for golf fees earned (service revenue).
May 19
Sold 150 coupon books for $10 each. Each book contains four
coupons that enable the holder to play one round of disc golf.
May 25
Withdrew $800 cash for personal use.
May 30
Pay $250 as salaries for part-time employees.
May 30
Paid Discs Are Us the full amount due.
May 31
Received $2,100 cash for fees earned.
Date
Accounts
Debit
Credit

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InformationBUS-FP3061 Fundamentals of Accounting
Assessment 3, Part 2 TemplateInstructions:
Download and save a copy of this Excel file. Using the
information from this worksheet, prepare the cash flow
statement on the next worksheet.Skylar Enterprises, Inc.
Comparative Balance
SheetsAssets12/31/121/1/12DifferenceCash$73,000$22,000$51,
000Accounts
receivable$85,000$76,000$9,000Inventory$170,000$189,000$1
9,000Land$75,000$100,000$25,000Equipment$260,000$200,00
0$60,000Accum. Depreciation - Equipment-$66,000-
$32,000$34,000Total$597,000$555,000Liabilities and
EquitiesAccounts payable$39,000$47,000$8,000Bonds
payable$150,000$200,000$50,000Common
stock$216,000$174,000$42,000Retained
earnings$192,000$134,000$58,000Total$597,000$555,000Addit
ional Information:
1. Net income for 2012 was $103,000.
2. Cash dividends of $45,000 were paid.
3. Bonds payable amounting to $55,000 were redeemed.
4. Common stock was issued for $42,000 cash.
5. No equipment was sold during 2012.

6. Land was sold at cost during 2012.
Cash Flow StatementSkylar Enterprises, Inc.
Statement of Cash Flows - Indirect Method
For the Year Ended December 31, 2012Cash Flow from
Operating Activities:Cash Flow from Investing Activities:Cash
Flow from Financing Activities:
u03a1BUS-FP3061 Fundamentals of Accounting
Assessment 3, Part 1 Assessment TemplateInstructions:
Classify each of the following cash inflows and outflows as
operating, investing, or financing activities.
For each item in Column A, place an "X" in the appropriate
inflow/outflow cell and cash flow activitiy cell.Column
AInflowOutflow&OperatingInvestingFinancing1. Sale of a
piece of company equipment.2. Sale of common stock.3.
Payment to suppliers for merchandise purchased.4. Payment to
lenders for interest on note payable.5. Sale of investments in
other companies.6. Purchase of land to expand plant size.7.
Payment to stockholders as cash dividends.8. Sale of goods or
services.9. Payment to employees for wages and salaries.10.
Lending of money to other business entities.11. Payment to
government for property and income taxes.12. Collection of
principal on loans to other entities.13. Interest and dividends
received.14. Issue of bonds to support company growth.15.
Purchase of investments in debt or equity of other entities.16.
Payment to other entities to cover expenses incurred.17.
Buyback of company stock from investors.
TitleBUS-FP3061 – Fundamentals of Accounting

Instructions
In each of the two sets of organization financial statement
information, two items have been omitted. Replace the question
marks with the missing amounts. Use the area below the table to
show any calculations used to arrive at the final answer for each
missing amount.
Smith Industries ($)
Jones Chips, Inc. ($)
Beginning of year:
Total assets
110,000
129,000
Total liabilities
85,000
?
Total equities
?
80,000
End of year:
Total assets
160,000
180,000
Total liabilities
120,000
50,000
Total equities
40,000
130,000
Changes during the year in equities:
Additional owner investment
?
25,000
Owner's withdrawals

29,000
?
Total revenues
215,000
100,000
Total expenses
175,000
60,000
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BUS-FP3061 – Fundamentals of Accounting
Southwest Business School
Adjusted Trial Balance
December 31 20XX
Debit ($)
Credit ($)
Cash
26,000
Accounts receivable

7,500
Teaching supplies
2,600
Prepaid insurance
12,000
Prepaid rent
0
Professional library
30,000
Accumulated depreciation—Professional library
15,000
Equipment
70,000
Accumulated depreciation—Equipment
28,000
Accounts payable
36,000
Salaries payable

400
Unearned training fees
6,600
Common stock
10,000
Retained earnings
53,600
Dividends
40,000
Tuition fees earned
109,500
Training fees earned
42,400
Depreciation expense—Professional library
6,000
Depreciation expense—Equipment
12,000
Salaries expense

48,400
Insurance expense
3,000
Rent expense
24,000
Teaching supplies expense
7,400
Advertising expense
7,000
Utilities expense
5,600
_______
Totals
$301,500
$301,500
Southwest Business School
Income Statement
For Year Ended December 31, 20XX

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BUS-FP3061 Assessment 2, Part 2 TemplateBUS-FP3061
Fundamentals of Accounting
Use the following account information to prepare the 2011
balance sheet for Blaze Industries. Be sure to use the proper
format. If you need to research the format for balance sheets,
you may wish to start with the suggested materials in
Resources.
· Wages payable - $880.00.
· Supplies - $80.00.
· Common stock - $10,000.00.
· Equipment - $217,200.00.
· Interest payable - $3,600.00.
· Retained earnings - $27,520.00.
· Accounts receivable - $400.00.
· Long-term bonds payable - $150,000.00.
· Cash - $3,050.00.
· Advances from customers - $460.00.
· Prepaid insurance - $830.00.
· Accumulated depreciation - $29,100.00.

Blaze Industries
Balance Sheet, as of December 31, 2011
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BUS-FP3061 – Fundamental Accounting Principles
Assessment 2, Part 1 Template
Instructions: Using the following designations for balance sheet
categories, place the designator in the column next to the
account title.
· (CA) - Current Asset
· (LTA) - Long-term Asset
· (CL) - Current Liability
· (LTL) - Long-term Liability
· (EQ) - Equity
Account Title
Balance Sheet Category
Accounts Payable
Equipment
Prepaid rent
Short-term investments

Accounts receivable
Land
Common stock
Cash
Accumulated depreciation
Goodwill
Bonds payable
Retained earnings
Preferred stock
Mortgage payable
Salaries payable
Allowance for uncollectibles
Inventories
Patent
Income tax payable
Short-term security deposits
Part 1BUS-FP3061 - Fundamentals of AccountingAssessment 1,
Part 1Instructions: When placing a (+) or (-) in the appropriate
cell, be sure to use ( ) around the character.Also, Some cells

may have both a (+) and (-) denoting an increase and decrease
in the same equation category.AssetsLiabilitiesOwner's Equity1.
Purchased supplies on account2. Received cash for providing a
service3. Paid expenses in cash4. Owner invested cash in the
business5. Owner withdraws cash from the business6. Received
cash from a customer who had previously been billed for
services provided7. Paid cash to purchase equipment8. Paid
employee salaries9. Paid a creditor from whom the business had
previously purchased supplies on account10. The company sells
new shares of stock11. Paid cash for monthly rent on the office
space12. Paid cash for monthly utility bills13. Performed
services on account14. Made a payment on a loan received from
the bank15. Purchased for cash merchandise that will be later
resold for profit
Part 2Answer w/Calculations1. The liabilities of the Smith
Company are $120,000 and the owner's equity is $232,000.
What is the the amount of Smith's total assets?2. The total
assets of Jones Company are $190,000 and its owner's equity is
$91,000. What is the amount of its total liabilities?3. The total
assets of Greene Company are $800,000 and its liabilities are
equal to one-half of its total assets. What is the amount of
Greens's owner's equity?4. Beginning the new year, Orange
Company had total assets of $800,000 and total liabilities of
$300,000. If total assets increased by $150,000 during the year
and total liabiities decreased by $80,000, what is the owner's
equity total at the end of the year?5. Beginning the new year,
Orange Company had total assets of $800,000 and total
liabilities of $300,000. If during the year Orange Company's
total liabilities increased by $100,000, and owner's equity
decreased by $70,000, what is the company's ending amount of
total assets?6. Beginning the new year, Orange Company had
total assets of $800,000 and total liabilities of $300,000. If total
assets decreased by $80,000 and owner's equity increased by
$120,000 during the year, what is the company's year-end total
liabilities amount?

Part 3Instructions: Click in the large box to beginning typing
your response for each scenario.Describe the role ethics has in
an accounting system.Scenario 1Scenario 2Scenario 3Scenario
4Scenario 5Scenario 6

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