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6. Alton Appliance Service had net income for the yearof $32,000. In addition, the balance sheet reports thefollowing balances: Calculate the return on assets (ROA) for AltonAppliance Service the year ending December 31,2018. One of the many tools that financial statements canuse to determine how well a company is performingis the company's return on assets (ROA). Return onassets measures how profitably a company uses itsassets. Return on assets is calculated by dividing netincome by average total assets.
Let’s begin by identifying which of Alton Appliance's accounts are asset accounts. Recall that an asset is an economic resource that is expected to benefit the business in the future. Assets are something the business owns or has control of that has value. Cash, receivables, merchandise inventory, furniture, and land are examples of assets. Go ahead and identify which of Alton Appliance’s accounts are assets. (Complete all answer boxes.)Is the account an asset?In order to calculate average total assets for the period, we must first calculate total assets at the beginning and at the end of the period. Now that we have identified which accounts are assets, we can calculate the totals using the information given in the question.Complete the formula below to calculate Alton Appliance Service’s ROA for the year. Be sure to calculate average total assets by suing the totals you computed in the preceding step. 7. Which of the following accounts is a liability? 8. Calculate the Accounts Payable balance. (Enter the balance, along with a “Bal.” reference on the correctside of the T-account.)
Transactions are first recorded in a journal, which is the record of transactions in date order. Journalizing a transaction records the data only in the journal – but not in the ledger (the record which holds all of the accounts of a business). The data must also be transferred to the ledger. The process of transferring data from the journal to the ledger is called posting. We post from the journal to the ledger. Debits in the journal are posted as debits in the ledger and credits as credits – no exceptions. The journalizing and posting process has five steps: Step 1: Identify the accounts and the account type (asset, liability, or equity).