Question

2. Below the Adjusted Trial Balance for Pasadena Pet Store, Inc. at June 30, 2018 This is the month-end for Certified. Prepare the income statement, statement of stockholders' equity and a classified balance sheet in good form. Pasadena Pet Store Adjusted Trial Balance June 30, 2018 14,000 2,500 500 3,400 Cash Accounts Receivable Prepaid Insurance Store Equipment Accum Dep: Store Equipment Accounts Payable Unearned Revenue Common Stock, June 1, 2018 Retained Earnings, June 1, 2018 Dividends Sales Revenue Wages Expense Cost of Goods Sold Office Supplies Expense Depreciation Exp: Store Equipment Income Taxes Expense 600 2,200 1,600 11,000 3,250 250 8,900 2,600 3,250 500 450 100 27,550 $ $ 27,550 3. Using the classified balance sheet you prepared in #2, calculate: a. Working Capital b. The Current Ratio

Please help!!!

Answer 1

a. Working Capital b. The Current Ratio $13,200 4.47 : 1 $13.20 Working Notes: Current assets = Cash + Accounts Receivable + Prepaid Insurance = $14,000+$2,500+$500 = $17,000 Current Liabilities = Accounts payable + Unearned Revenue = $2,200+$1,600 = $3,800 Working Capital = Current Assets - Current Liabilities = $17,000 - $3,800 = $13,200 Current Ratio = Current assets Current Liabilities = $17,000 / $3,800 = 4.47