Question

cee the comparative balance sheets of Star Wars Hotel Corp., Inc. for the y 2019. orp., Inc. for the years 2018 and 2019 Star Wars Hotel Corp., Inc. Condensed Balance Sheets December 31, 2018 and 2019 Current assets: 2018 Cash $10,000 Marketable securities 35,000 Accounts receivable 26,500 Inventories 10,000 Prepaid Expenses 15,000 Noncurrent assets: Property, Plant & Equipment 200,000 Accumulated depreciation (20.000) Total Assets $276,500 $12,000 32,000 18,500 20,000 16,000 325,000 (64,000) $359,500 Current liabilities: Accounts payable Mortgage payable (current) Dividends payable Noncurrent liabilities: Mortgage payable Notes payable Total Liabilities $28,000 5,000 5,000 $26,000 22,000 10,000 75,000 35,000 148,000 110,000 30,000 198,000 Common stock Treasury stock Retained earnings Total Liabilities and Owners' Equity 85,000 (20,000) 63,500 $276,500 100,000 (30,000) 91,500 $359,500 Using the balance sheet information, answer the following questions: 1. What amount of existing debt must be paid during 2019? 2. What is the total of current assets at the end of 2018? 3. How has the change in accounts receivable during 2018 affected cash at the end of 2018? 4. How much does The Star Wars Hotel Corp., Inc. owe its stockholders at the end of 2018? 5. What is the net book value of The Hotel's fixed assets at the end of 2018? 6. What amount of past earnings are available for distribution to The Hotel's owners at the end of 2018?

Answer 1

Answer to Question 1: Calculation of Amount of Debt must be paid during 2019: Current Liabilities of 2018 will be the amount of debt that must be paid during 2019. So, that amount shall be Accounts Payable 28,000.00 Mortgage Payable (Current) 5,000.00 Dividends Payable 5,000.00 Total Amount payable during 2019 $ 38,000.00 Answer to Question 2: Calculation of total current assets at the end of 2018: Cash 10,000.00 Marketable Securities 35,000.00 Accounts Receivable 26,500.00 Inventories 10,000.00 Prepaid Expenses 15,000.00 Total Current Assets 96,500.00 AAAA

Answer to Question 3: Calculation of Effect of Changes in Accounts Receivables on Cash at the end of 2019: Accounts Receivable on 2018 $ 26,500.00 Accounts Receivable on 2019 $ 18,500.00 Decrease in Accounts Receivables $ 8,000.00 Decrease in Accounts Receivables results increase in Cash balance. So, there is increase of Cash Balance by $8,000 in Cash Balance. Answer to Question 4: Calculation of Stockholders' Equity at the end of 2018: Total Assets $ 276,500.00 Less: Total Liabilities $ (148,000.00) Total Stockholders' Equity $ 128,500.00