QuestionQuestion

For the final project, in Week 7 you will prepare an income statement and a balance sheet for The Coffee Hut for a future year. Then you will prepare various ratio analyses, and a contribution margin analysis, to see how Sue's business is doing. All of the work will be completed on a template that will be provided to you.
Instructions:
1. The template includes all the data necessary to complete the two financial statements, and ratio analyses. But, the financial statement data is in random order, so you must determine where in each financial statement the items should be placed.
2. Complete the income statement first, since net income will affect stockholders' equity on the balance sheet. Note that you need to calculate cost of goods sold for the income statement.
3. Next, complete the balance sheet, taking into account the effect net income has on stockholders' equity. Before you finish, make sure the balance sheet meets the accounting equation.
4. Now you can complete your ratio analyses. Since certain ratios require prior year data, that data has also been included in the template. After calculating the ratios, add a brief analysis about what each ratio means for The Coffee Hut's financial position and results of operations.
5. The final step is to complete the contribution margin question. If cost of goods sold is the only variable cost, and the contribution margin per drink is $3.40, how many coffee drinks did The Coffee Hut sell? What was the average selling price?

Solution PreviewSolution Preview

This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.

Accounting Assignment
    $23.00 for this solution

    PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

    Find A Tutor

    View available Accounting Tutors

    Get College Homework Help.

    Are you sure you don't want to upload any files?

    Fast tutor response requires as much info as possible.

    Decision:
    Upload a file
    Continue without uploading

    SUBMIT YOUR HOMEWORK
    We couldn't find that subject.
    Please select the best match from the list below.

    We'll send you an email right away. If it's not in your inbox, check your spam folder.

    • 1
    • 2
    • 3
    Live Chats