## [answered] Metro State - ACC 210 FALL 2016 STUDENT NAME: ACCOUNTING CA

Need help with question 2 dealing with ratios and 3 if the bank should give the loan or not and why

Metro State - ACC 210

FALL 2016

STUDENT NAME:

ACCOUNTING CASE 3 - SELF-EMPLOYED: Metro Accounting LLC Peter Ramirez asked for a loan of \$40,000 to grow the business. The US Bank loan officer requested the financial statements as of April 30, 2014

The loan officer wants to see the Balance Sheet, Income Statement , the Statement of Cash Flow, and the basic financial ratios Requirements:

1) Use the financial statements attached and prepare the Statement of Cash Flows for the period March 1 - April 30 2014. Use the guidelines learned in Chapter 12 of your

textbook. YOU CAN DEVELOP YOUR CASH FLOW STATEMENT IN THE OPEN TAB OF THE TEMPLATE OR OTHER MEAN.

2) Calculate the following financial ratios as of April 30, 2014 ( use the guidelines learned in Chapter 13 of your textbook): Acid Test Ratio, Current Ratio, Current Ratio,

Debt Ratio, Profit Margin, and Return on Common Stockholder's Equity.

3) Brief comments on the following: based on your financial analysis do you think the Bank would give Peter the loan? Respond Yes or NO and your reasoning about that. Statement of Cash Flows

For Period March 1, 2014 - April 30, 2014

Cash flows from Operating Activities

Net

Income to reconcile net income to net cash provided by

operating activities

Increase in accounts recievable

Increase in pre-paid expenses

Increase in accounts payable

Net cash provided by operating activities

Cash flows from investing activities

Cash received from sale of plant assets

Cash paid for purchase of campany assets

Net cash provided by investing activities

Cash flows from financing activities

Cash paid for owner's distributions

Net cash used in financing activities

Net increase in cash

Cash balance at prior month-end

Cash balance at current year-end \$ 7,435 \$ (3,500)

\$

(450)

\$ (26,895)

\$ (23,410)

\$

\$ (31,130)

\$ (31,130)

\$ 18,000

\$ (1,450)

\$ 16,550

\$ (37,990)

\$

\$ (37,990) STUDENT NAME:

Metro Accounting LLC

Income Statement

For the Period: March 1 - April 30, 2014

Amount

Revenues

Accounting Services Fees \$10,650 Total Revenues

Expenses

Legal and Professional Fees

Rent

Meals &amp; Entertainment

Wages &amp; Salaries Total Expenses

Net Income Total 10,650.00 700

500

450

500

65

1,000 3,215

\$ 7,435.00 STUDENT NAME:

Metro Accounting LLC

Balance Sheet

March 31 2014

Assets Cash

Machinery &amp; Equip-Computers

Machinery &amp; Equip-Cell Phones

Furniture &amp; Fixtures

Prepaid Rent

Accounts Receivable

Vehicle Total Assets Liabilities

\$19,300

\$900

\$850

\$880

\$450

3,500

25,000 \$50,880 Credit Card Payable

Notes Payable Toyota Corp \$2,895

\$24,000 Total Liabilities 26,895 Equity

Owner's contribution

Owner's distributions

Net Income

Total Equity

Total Liabilities and Equity \$ 18,000

(1,450)

7,435

23,985

50,880 Acid Test Ratio, Current Ratio, Current Ratio, Debt Ratio, Profit Margin, and Return on Common Stockholder's Equity.

Debt Ratio= Total liabilities / total assets

Profit margin = net income / net sales ockholder's Equity.

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