Financial Accounting
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No of pages / words:
7 / 1727
Essay content:
Given: Current Ratio = 2.2:1; Current Asset = $33,000, Non-current Asset = $55,000; Liabilities = $15,000
Current Liabilities = Current Assets / Ratio
Current Liabilities = $33,000/2.2
Current Liabilities = $15,000
OE = Total Assets - Total Liabilities
OE = $88,000 - $15,000
OE = $73,000
2-1 E...displayed 300 characters
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Given: Non-current Assets = $60,000; Total Assets = $95,000; Current Assets = $35,000; OE = $70,000
Current Liabilities = $95,000 - $70,000
Current Liabilities = $25,000
Current Ratio = $35,000 / $25,000
Current Ratio = 1.4:1
2-2
|J.L. Gregory Company |
|Balance Sheet As of |
|June 30 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
|ASSETS | | | |LIABILITIES AND OWNER'S EQUITY | | |
| | | | | | | |
|Current Assets | | | |Current Liabilities | | |
|Cash |$89,000 | | |Accounts Payable |$241,000 | |
|Marketable Securities |$379,000 | | |Bonds Payable |$700,000 | |
|A/C Receivables |$505,000 | | |Accrued Expenses |$107,000 | |
|Inventories |$513,000 | | |Notes Payable |$200,000 | |
| | | | |Tax Liabilities |$125,000 | |
| | | | | | | |
|Total Current Assets | |$1,486,000 | |Total Current Liabilities | |$1,373,000 |
| | | | | | | |
| | | | | | | |
|Properties, Plant and Equipment | | | |Shareholder's Equity | | |
|Land | |$230,000 | |Paid-in Capital |$1,000,000 | |
|Building and Equipment |$1,881,000 | | |Retained Earnings |$620,000 | |
|Less: Accumulated Depreciation |$924,000 |$957,000 | | | | |
|Net: Properties, Plant and Equipment | |$1,187,000 | |Total Shareholder's Equity | |$1,620,000 |
| | | | | | | |
| | | | | | | |
|Other Assets | | | | | | |
|Investment in the Peerless Company | |$320,000 | | | | |
| | | | | | | |
| | | | | | | |
|Total Assets | |$2,993,000 | |Total Liabilities and Shareholder's Equity |$2,993,000 |
Retained Earnings = Assets – (Liabilities + Paid-in Capital)
= $2,993,000 – ($1,373,000 + $1,000,000)
= $2,993,000 – $2,373,000
= $620,000
2-3
|1 |Increase in asset; increas in owner's equity |
|2 |Decrease in Liabilities; increase in owner's equity |
|3 |Decrease in asset |
|4 |Increase in asset |
|5 |Increase in liabilities |
|6 |Increase in asset |
|7 |Increase in asset |
|8 |No effect since it is only a declaration |
|9 |Decrease in owner's equity |
|10 |Decrease in owner's equity |
2-4
2-5
2-6
|Brian Company |
|Balance Sheet As of |
|December 31 |
| | | | | | | |
|ASSETS | | | |LIABILITIES | | |
| | | | | | | |
|Current Assets | | | |Current Liabilities | | |
|Cash |$2,000 | | |Accounts Payable |$5,000 | |
|A/C Receivables |$7,000 | | |Current Portion of Bonds Payable |$2,000 | |
|Marketable Securities |$3,500 | | |Wages Payable |$1,500 | |
|Plant & Equipment |$8,500 | | | | | |
| | | | | | | |
|Total Current Assets | |$21,000 | |Total Current Liabilities | |$8,500 |
| | | | | | | |
|Other Assets | | | |Other Liabilities | | |
|Long - Term Investments | |$1,500 | |Bonds Payable | |$8,000 |
| | | | | | | |
| | | | | | | |
|Total Assets | |$22,500 | |Total Liabilities | |$16,500 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
|Current Ratio : 2...displayed 300 characters
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