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Web Homework 1 Chapter 1

Web Homework 1 Chapter 1 - Initech Corporation Financial...

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The University of Texas at Austin McCombs School of Business ACC 310F: Foundations of Accounting Homework #1 Once you have completed the assignment below, you must enter your answers in the Assignments section of Blackboard on the answer sheet provided; not all homework answers will be turned in. Your answer sheet is due by 8am on Monday, Sept. 15, 2008; print or save your conformation page to verify that your assignment was successfully submitted. If you have any clarification questions about the assignment, please post a note on the ACC 310F Class Q&A Discussion Board located in the Communication section of Blackboard. Initech Corporation was founded on January 1, 2006 when its owners invested $75,000. Since then, the company has been fairly successful and no additional investments have been made; however, in an effort to save some money, the president has been keeping track of the financial records rather than hiring a professional accountant. Although some data is missing, a comparative two year report appears below.
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Unformatted text preview: Initech Corporation Financial Report December 31, 2007 2006 Advertising Expense 6,656 5,943 Salary and Wage Expense ? 44,628 Buildings and Equipment 41,419 ? Cost of Goods Sold 189,093 154,994 Long-Term Liabilities 32,524 25,868 Revenue 246,496 220,086 Accounts Payable ? 3,692 Capital 87,681 ? Cash 6,232 5,419 Selling Expense 732 711 Inventory 4,723 4,294 Administrative Expense 891 594 Accounts Receivable 2,129 2,241 Land 70,342 70,342 Withdrawals 1,600 1,200 A. Prepare a corrected income statement, statement of owner’s equity and balance for the years available. B. If you were a prospective creditor, briefly describe how you would react to the company’s financial information? C. If you were a prospective investor, briefly describe how you would react to the company’s financial information? D. Given the company’s results, briefly describe one recommendation that you would make to improve its future financial situation?...
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