Question

Question 1 of 4 < These financial statement items are for Cullumber Company at year-end, July 31, 2022. Salaries and wages payable Salaries and wages expense Supplies expense Equipment Accounts payable Service revenue Rent revenue Notes payable (due in 2025) Common stock Cash Accounts receivable Accumulated depreciation-equipment Dividends Depreciation expense Retained earnings (beginning of the year) $3,600 59,100 17,100 16,360 4,600 67,700 10,000 3,300 16,000 35,440 11,300 7,100 4,000 4,000 35,000

Answer 1

                          CULLUMBER COMPANY

                                      Income statement                                                 

	$	$
Service Revenue	67,700
Rent Revenue	10,000
Total Revenue		77,700
Less: Expenses
Salaries and Wages Expenses	59,100
Supplies Expenses	17,100
Depreciation Expenses	4,000
Total Expenses		(80,200)
Net Loss		($2,500)

2) Retained Earnings is calculated as follows:

                        CULLUMBER COMPANY

                        Retained Earnings

	$
Retained Earnings Beginings	35,000
Dividend Paid	(4,000)
Net Loss	(2,500)
Retained Earnings Endings	$28,500

3) Classified Balance Sheet is prepared as follows:

Assets	$	$
Current Assets:
Cash	35,440
Account Receivable	11,300
Total Current Assets		46,740
Property,Plant and Equipment
Equipment	16,360
Less: Accumulated Depreciation	7,100	9,260
Total Assets		$56,000
Total Liability and Stockholder's Equity
Current Liability:
Salary and Wages Payable	3,600
Account Payable	4,600
Total Current Assets		8,200
Notes Payable		3,300
Stockholder's Equity:
Common Stock	16,000
Retained Earnings Endings	28,500
Total Stockholder's Equity		44,500
Total Liability and Stockholder's Equity		$56,000

1) Current Ratio = Current Assets / Current Liability

                      = $46,740 / $8,200

                     = 5.7

2) Debt to Asset Ratio = Total Debt / Total Assets

                                  = ($8,200 + $3,300) / $56,000 * 100

                                  = 11,500 / $56,000 * 100

                                  = 20.54%