# The 2017 balance sheet of Staples, Inc. shows total assets of \$8,271 million, operating assets of \$6,566 million, operating liabilities of \$3,527 million, and shareholders’ equity of \$3,688 million. Staples' 2017 net operating assets are: Select one: A. \$11,798 million B. \$ 6,566 million C. \$ 4,744 million D. \$ 3,039 million E. None of the above

D. \$ 3,039 million

Explanation:

Net Operating Assets = Operating Assets - Operating Liabilities

Net Operating Assets = \$6,566 million - 3,527 million

Net Operating Assets = \$3,039 million

## Related Questions

Mary signed up and paid \$660 for a 6 month ceramics course on June 1st with Choplet Ceramics. As of August 1st, Choplet’s accounting records would indicate:

Answer: \$220 of revenue, \$440 of deferred revenue

Explanation:

Based on the information in the question, revenue will be recognised for the months of June and july which will be:

= 2/6 × \$660

= \$220

Deferred revenue will be:

= \$660 - \$220

= \$440

Therefore, As of August 1st, Choplet’s accounting records would indicate \$220 of revenue, \$440 of deferred revenue.

The owner of Cafe Bakka is considering investing in a new point-of-sale system. He spent \$10,000 on his current point-of-sale system five years ago. The new point-of-sale technology will cost \$25,000, and will dramatically improve the speed at which his counter staff will be able to take orders, and reduce the owner's administrative work. How should the owner account for the cost of the current point-of-sale technology when performing the capital budgeting analysis to determine whether or not to purchase the new point-of-sale technology? a. He should ignore the cost of the current point-of-sale system when evaluating the cost of the new point-of-sale system. b. He should include the cost of the current point-of-sale system as part of the cost of the new point-of-sale system.

The answer and procedures of the exercise are attached in the following archives.

Explanation

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.

A merchandiser has four closing journal entries at the end of an accounting cycle. Select the correct entries below. (Check all that apply.) Close asset accounts. Close the dividends account. Close revenue accounts. Close expense accounts. Close the merchandise inventory account. Close the income summary account.

## A Merchandiser

### Closing Journal Entries:

i) Close the dividends account.

ii) Close revenue accounts.

iii) Close expense accounts.

iv) Close the income summary account.

Explanation:

Closing journal entries are closing entries made at the end of an accounting period to zero out all temporary accounts so that their balances are transferred to permanent accounts.  To close temporary accounts is to set them at the end of the period to nil balances.

Temporary accounts are not permanent.  They do not have running balances that continue from one period to the next, unlike permanent accounts.  All temporary accounts are closed to the income statement and used to determine the financial performance of an entity.  Permanent accounts are stated in the balance sheet (to determine the financial position of an entity) and appear as opening balances in the next period's accounts.

A merchandiser has four closing journal entries: Close the dividends account. Close revenue accounts. Close expense accounts. Close the income summary account, hence options B, C, D, and F are correct.

Closing journal entries are entries made to close down all temporary accounts so that their balances may be transferred to permanent accounts at the conclusion of an accounting period.

Unlike permanent accounts, they don't have running balances that carry over from one month to the next.  The income statement closes all temporary accounts, which is how an entity's financial success is assessed.

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Which of the following statements are inconsistent with the efficient market hypothesis?a. The average annual return on stocks is greater than zero. b. Stocks that outperform the index in March always underperform it in April. c. Half of fund managers are able to beat their relevant index each year, before fees. d. Stocks that outperform the index in March always outperform it in April.

b. Stocks that outperform the index in March always underperform it in April.

d. Stocks that outperform the index in March always outperform it in April.

Explanation:

The Efficient market hypothesis states that in an efficient market, all the available information in the market are reflected in the prices of the stocks being traded. As such, all stock are fairly priced.

Stocks that perform in a certain way in March and then in another way in April are violations of the hypothesis. This is because if indeed the market was efficient, the prices would adjust to reflect the different performances by month such that there would be no more fluctuations.

Troy (single) purchased a home in Hopkinton, MA, on January 1,2007, for \$300,000. He sold the home on January 1, 2016, for\$320,000. How much gain must Troy recognize on his home sale ineach of the following alternative situations? d. Troy rented thehome from January 1, 2007, through December 31, 2011. He lived inthe home as his principal residence from January 1, 2012, throughDecember 31, 2012. He rented out the home from January 1, 2013,through December 31, 2013, and lived in the home as his principalresidence from January 1, 2014, through the date of the sale.Assume accumulated depreciation on the home at the time of sale was\$0. Gain recognized? The answer is not \$28,571 The answer is not\$4,375

\$20,000

Explanation:

Time difference from the "Purchase date" to "Sale date" = 9 years (1/1/2007 to 1/1/2016)

Given that, in the 9 years, Troy rented the home for first 5 years (1/1/2007 to 1/1/2012), and lived in the home as his principal residence for next 1 year(1/1/2012 to 31/12/2012)

and again rented out the home for 1 year (1/1/2013 to 31/12/2013), and again started to lived in the home as his principal residence for next 2 years. (1/1/2014 to 1/1/2016)

i.e. when we look at the last 5 years before the sale of house, Troy has lived 3 years in the home as his principal residence.

And Troy has acquired the home for \$300,000 and not acquired by "like kind exchange" of property.

As per IRS rules, a owner must live at least 2 years in the home as his principal residence & home must not be acquired by 1031 exchange (like/kind exchange).

Here, Troy satisfies both conditions. (He has lived more than 2 years, and not acquired by like/kind exchange)

So, as per above rules, Troy's home sale is eligible for Maximum exclusion of \$250,000 gain (being Troy is Single)

Here, as per IRS rules, Gain = Amount Realized / Adjusted Basis = \$320,000 - \$300,000 = \$20,000.

But, being Troy home sale is eligible for Maximum exclusion of \$250,000, this \$20,000 gain is deducted and Net Gain = \$0.

Troy's gain on the sale of his home is \$20,000. However, he is eligible to exclude this gain from taxation because he lived in the home as his principal residence for 2 out of the 5 years leading up to the sale, as per IRS guidelines.

### Explanation:

Troy's gain on his home sale depends on his usage of the property and the IRS's rules on excluding gains from the sale of a principal residence. According to these rules, a person can generally exclude the gain up to \$250,000 from the sale of a principal residence if they owned the house and lived in it as their main home for at least 2 out of the last 5 years before the sale. The years of ownership and use don't need to be consecutive.

Troy purchased the home in 2007 and sold it in 2016. He rented the home initially then lived in it as his principal residence, then rented it again, and lived in it again until the sale. Combining these periods, he lived in the house as his principal residence for only 3 years (2012, 2014, 2015). However, these years are within the 5-year window before the sale (2012-2016).

Troy's recognized gain is the selling price of the home minus the purchase price. Thus, his recognized gain is \$320,000 - \$300,000 = \$20,000. However since he lived in the residence for 2 out of the 5 years before the sale, this gain is excluded from taxation, according to IRS rules.