Accounting
Answers
To calculate the figures needed to create the balance sheet and income statement for the Argo Sales Corporation, you will need to begin by gathering information about the company's financial records for the relevant time period. Details about the company's assets, liabilities, and equity should be gathered in order to determine the values at the beginning and end of the period. You will also need to determine the financial transactions that took place during the period, such as sales, purchases, assets acquired, liabilities incurred, investments made, and dividends paid. Knowing this information, you can then calculate relevant ratios related to the company's financial performance, such as gross profit margin, net profit margin, rate of selling expenses to net sales, inventory turnover, quick asset composition, acid-test ratio, current ratio, asset turnover, ratio of total assets to intangible assets, ratio of accumulated depreciation to gross property, plant, and equipment, ratio of accounts receivable to accounts payable, ratio of working capital to stockholders' equity, and debt to equity ratio.
After calculating the various ratios, you can then use the ratios to determine the figures that will be needed for the balance sheet and income statement. For example, the gross profit margin ratio can be used to calculate the gross profit figure by subtracting the cost of goods sold from net sales. The inventory turnover ratio can be used to calculate the cost of goods sold by dividing the cost of goods sold by the inventory turnover ratio. From there, the