Question

Adjusted Trial Balance Cash $ 3,500 8,000 3,600 75,000 Prepaid insurance $12,000 600 30,000 14,100 Common stock. 7,500 102,200 4,200 Miscellaneous income.. Salaries expense. Rent expense. Insurance expense. Depreciation expense.. . 42,800 12,900 1,800 8,000 8,800 8,800 $171,900 $171,900

Prepare a detailed Balance Sheet and also calculate the following ratios:

A) Current Ratio

B) Working Capital

C) Assets Turnover

D) Fixed Assets Turnover

E) A/R Turnover

F) Debt Ratio

Answer 1

Income Statement
Particulars	Amount($)	Amount($)
Revenues
Service fee Earned	102200
Miscellaneous Income	4200
Total Revenues		106400
Less: Expenses
Salaries Expenses	42800
Rent Expenses	12900
Insurance Expenses	1800
Depreciation Expenses	8000
Income Tax Expenses	8800
Total Expenses		74300
Net Income		32100

Retained Earnings Statement
Particulars	Amount($)	Amount($)
Retained Earnings Jan 1, 20xx		14100
Net income	32100
Less: Dividends	7500
Retained Earnings		24600
Retained earnings Dec31, 20xx		38700

Stockholders Equity
Particulars	Amount($)
Common stock	30000
Retained Earnings	38700
Total Stockholders Equity	68700

Balance Sheet
Assets	Amount($)	liabilities	Amount($)
Cash	3500	Accounts Payable	600
Accounts Receivable	8000	Income Tax Pyable	8800
Prepaid Insurance	3600	Stockholders Equity	68700
Equipment                                            75000
Less: Accumulated Depreciation 12000	63000
	78100		78100

A) Current Ratio = Current Assets / Current liabilities= 3500+8000/600+8800 =11500/9400=  1.2234

B) Working Capital = Current Assets - Current liabilities ==11500-9400 =2100

C) Assets Turnover= Total Sales / average of Total Asses

  average of Total Asses =3500+8000+3600+63000/4 = 19525

Assets Turnover= 102200/19525= 5.234315

D) Fixed Assets Turnover= Net Sales/ Average Fixed Assets= 102200/63000= 1.622222

E). Accounts Receivable Turnover =Net Sales/ Average Accounts Receivables = 102200/8000= 12.775

F). Debt Ratio = Total Liabilities / Total Assets = 9400/78100 = 0.120358