Ex. 258
English Company billed its customers a total of $1,890,000 for the month of November. The total includes a 5% state sales tax.
Instructions
(a)Determine the proper amount of revenue to report for the month.
(b)Prepare the general journal entry to record the revenue and related liabilities for the month.
Ex. 259
Hibbett Company does not segregate sales and sales taxes on its cash register. Its register total for the month is $259,700, which includes a 6% sales tax.
Instructions
Compute sales taxes payable, and make the entry to record sales and sales taxes payable.
Ex. 260
Based on the following information, compute the (1) current ratio and (2) working capital.
Current assets$200,000
Total assets900,000
Current liabilities80,000
Total liabilities500,000
Ex. 261
Mehring's 2011 financial statements contained the following data (in millions).
Current assets$16,890Accounts receivable$1,550
Total assets 42,430Interest expense980
Current liabilities 15,160Income tax expense1,270
Total liabilities 32,580Net income2,230
Cash 380
Instructions
(a)Working capital.(b)Current ratio.
Ex. 262
Banks Company is considering two alternatives to finance its purchase of a new $4,000,000 office building.
(a)Issue 400,000 shares of common stock at $10 per share.
(b)Issue 8%, 10-year bonds at par ($4,000,000).
Income before interest and taxes is expected to be $3,000,000. The company has a 30% tax rate and has 600,000 shares of common stock outstanding prior to the new financing.
Instructions
Calculate each of the following for each alternative:
(1)Net income.
(2)Earnings per share.