Question

Bleeker Street Bounty Work Sheet (partial) For the year ended December 31, 20- Income Statement Balance Sheet Account Title Debit Debit Credit Credit Cash Accounts Receivable Merchandise Inventory Store Supplies Office Supplies Prepaid Insurance Store Equipment Accumulated Depreciation-Store Equipment Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Saiaries Payable Long-Term Notes Payable Carlo Perez, Capital Carlo Perez, Drawing Income Summary Sales Sales Returns and Allowances Purchases Purchases Returns and Allowances Purchases Discounts Sales Salary Expense (selling) Office Salary Expense (general) Store Supplies Expense (selling) 12,300 25,000 16,000 1,100 600 1,500 66,000 38,000 18,000 10,000 22,300 400 36,000 50,600 32,000 17,000 16,000 61,500 500 23,000 700 400 9,200 10,500 300 nt Congage Leamng Powered by Cognero Page 39

How should this look in the end? looking for something to cross check against, thanks.

Answer 1

Answer:

a.Total Current Assets = Cash + Accounts Receivable + Merchandise Inventory + Store Supplies + Office Supplies + Prepaid Insurance = 12300 + 25000 + 16000 + 1100 + 600 + 1500 = 56500

b.Working Capital = Current Assets - Current Liabilities = 56500 - 22700 = 33800

Current Liabilities = Accounts Payable + Salaries Payable = 22300 + 400 = 22700

c.Current Ratio = Current Assets / Current Liabilities = 56500 / 22700 = 2.49

d.Accounts Receivable Turnover = Net Sales / Avg. Accounts Receivables = (61500 -500 ) / ( 25000 + 23200 ) / 2

                                               = 61000 / 24100 = 2.53