Homework Answers
(A)
(1)
current asset = cash + accounts receivable + inventory
= $180000 + $84000 + $124000
= $388000
(2)
current liabilities = note payable + Accounts Payable
= $163000 + $96000
= $259000
(3)
current ratio = current assets/current liabilities
= $388000/$259000
= 1.50 times
(4)
working capital = current assets - current liabilities
= $388000 - $259000
= $129000
(B)
current asset = cash + accounts receivable + inventory
= $17000 + $84000 + $124000 = $225000
current liabilities = Accounts Payable
= $96000
(1)
current ratio = current assets/current liabilities
= $225000/$96000
= 2.34 times
(2)
Working capital = current assets - current liabilities
= $225000 - $96000
= $129000
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F) Debt Ratio
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Working capital accounts are current assets and current
liabilities.
Of the 13 accounts listed in the question, 7 are working capital
accounts, some involving an inflow of cash and some involving an
outflow of cash. Make a list of the 7 working capital accounts and
subdivide and subtotal your list into two categories, the number of
cash inflows and the number of cash outflows during the year. (Hint
- the grand total is a $12,000 outflow)
EXERCISE 4: WORKING CAPITAL...
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
$ 4.800 5,250 5,300 3,000 30,300 Accounts eceivable Prepaid advertising. .. . Trucks._.. . $10,000 Equipment . . . . Accumulated depreciation-Equipment... Accounts payable... Uneaned service fees . . 7,600 2,100 6.700 10,000 16,050 Retained eamings Service fees eaned... Rent expense.. 7.500 80,500 29,800 10,200 4,900 8,000
Selected amounts from Reingold Company's balance sheet from the beginning of the year follow: Cash Marketable Securities Accounts receivable. net Inventory Prepaid expenses Plant and equipment, net Accounts payable Accrued liabilities Notes due within one year Bonds payable in five years $ 57,000 $ 5,500 $ 318,800 $ 426,200 $ 5,400 $ 820,000 $ 176,600 $ 48,300 $ 74,000 $ 127,000 During the year, the company completed the following transactions X Purchased inventory on account, $40.250. a. Declared a cash...
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For gee-whiz devices calculate the following: working capital,
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