FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, & MANAGEMENT 2

MODULE 2

DUE DATE: November 26, 2020 (THURSDAY, ANYTIME)

OPTIONS IN ANSWERING THE ASSESSMENT:

Choice A: Type your answers on Microsoft Word

Choice B: Write your answers on your notebook or on a separate sheet

of paper and take a photo of it.

ASSESSMENT DESTINATION:

Your assessment should be sent through email:

jackmarioancuna@gmail.com

SUBJECT: (YOUR NAME) FOABM 2 ASSESSMENT 3

CHAPTER 3 – ASSESSMENT

MIKIE BUSTILLOS 12ABM

A. The December 31, 2022 balance sheet and income statement of SHOE-
SHOE MERCHANDISING are shown below:

SHOE-SHOE MERCHANDISING SHOE-SHOE MERCHANDISING

Balance Sheet
As of December 31, 2022 Income Statement
For the year ended December 31, 2022
ASSETS 2022 2021
Cash and cash equivalents ₱45,000 65,000
Accounts receivable - net 1,563,000 720,000 Sales (credit sales amount to ₱ 4,300,000) ₱ 5,400,000
Inventory 500,000 300,000
Prepaid assets 56,000 45,000 Cost of Sales (2,300,000)
Total current assets 2,164,000 1,130,000 GROSS PROFIT 3,100,000
Property, plant & equipment 850,000 650,000 Salaries expense (750,000)
Total noncurrent assets 850,000 650,000
TOTAL ASSETS 3,014,000 1,780,000
Utilities expense (150,000)
Rent expense (200,000)
LIABILITIES
Accounts payable - net 870,000 450,000
Depreciation expense (320,000)
Notes payable (current portion) 160,000 200,000 Bad debts expense (83,000)
Total current liabilities 1,030,000 650,000
Interest expense (45,000)
Notes payable (noncurrent portion) 350,000 430,000 PROFIT OF THE YEAR ₱ 1,552,000
Total noncurrent liabilities 350,000 430,000

TOTAL LIABILITIES 1,380,000 1,080,000

EQUITY
Owner's capital 1,634,000 700,000

TOTAL LIABILITIES & EQUITY ₱ 3,014,000 1,780,000

FOABM 2|Chapter 3 Page 1|4
FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, & MANAGEMENT 2
MODULE 2

Answer the MULTIPLE CHOICE QUESTIONS that follow. Encircle the letter of the
correct answer. Show your solutions on a separate sheet.

1. What is the current ratio?

a. 2.10 b. 2.20 c. 2.30 d. 2.40

2. What is the quick ratio?

a. 1.26 b. 1.37 c. 1.56 d. 1.87

3. How much is the working capital?

a. 1,134,000 b. 1,204,000 c. 1,351,000 d. 1,134,000

4. What is the Inventory turnover?

a. 5.25 b. 5.75 c. 5.92 d. 6.05

5. What is the days of the inventory?

a. 48.63 b. 52.54 c. 31.21 d. 63.48

6. What is the accounts receivable turnover?

a. 3.77 b. 3.87 c. 3.92 d. 4.13

7. What is the days of receivable?

a. 96.82 b. 98.62 c. 98.26 d. 92.86

8. What is the debt ratio?

a. 0.46 b. 0.48 c. 0.52 d. 0.63

9. What is the equity ratio?

a. 0.48 b. 0.54 c. 0.63 d. 0.72

10. What is the Debt-to-equity ratio?

a. 0.48 b. 0.54 c. 0.63 d. 0.84

11. What is the gross profit ratio?

a. 0.48 b. 0.54 c. 0.57 d. 0.72

12. What is the Net profit ratio?

a. 0.92 b. 0.54 c. 0.36 d. 0.29

13. How much is the return on assets?

a. 0.48 b. 0.54 c. 0.51 d. 0.72

FOABM 2|Chapter 3 Page 2|4

FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, & MANAGEMENT 2
MODULE 2

LIQUIDITY RATIOS

A. Current ratio: 2,164,000/1,030,000 = 2.10

B. Quick 45,000  1,563,000 ratio:

 1.56
1,030,000

C. Working capital 2,164,000  1,030,000  1,134,000

ACTIVITY RATIOS

500, 000 300, 000 2,300,000

D. Inventory turnover ( 2  400,000)(  5.75)
400,000
365
E. Days of Inventory  63.48
5.75
4,300,000
F. Accounts receivable turnover 1,563,000  720,000  1,141,500  3.77
2 1,141,500

365
G. Days of receivables  96.82
3.77

LEVERAGE RATIOS

1,380,000
H. Debt Ratio  0.46
3,014,000

1,634,000
I. Equity Ratio  0.54
3,014,000

1,380,000
J. Debt-to-equity ratio  0.84
1,634,000

PROFITABILITY RATIOS

3,100,000
K. Gross profit ratio  0.57
5,400,000

1,552,000
L. Net profit ratio  0.29
5,400,000

FOABM 2|Chapter 3 Page 3|4

FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, & MANAGEMENT 2
MODULE 2
1,552,000
M. Return on assets  0.51
3,014,000

1,552,000
N. Return on equity  0.95
1,634,000

FOABM 2|Chapter 3 Page 4|4