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# Compute total assets, total liabilities, total equity

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2-1
Total Assets - Using the following information, compute total assets
Equipment: \$10,000
Accounts payable: \$900
Capital Stock: \$1,500
Cash: \$800
Loan payable: \$9,000
Wages payable: \$500
Accounts receivable: \$1,000
Retained earnings: \$3,400
Inventory: \$3,500

2-2
Total Liabilities - Refer to data in 2-1.
Compute total liabilities

2-3 Total Owners' Equity
Refer to data in 2-1. Compute total owners' equity

2-4
The Accounting Equation
For the following cases, use the accounting equation to compute the missing quantity.
Assets Liabilities Owners' Equity
Case A \$10,000 \$ 4,000 A
Case B \$ 8,000 B \$3,500
Case C C 5,500 7,000
Case D 13,000 15,000 D

2-5
Balance Sheet
Using the data in 2-1, prepare a balance sheet

#### Solution Preview

2-1
Total Assets - Using the following information, compute total assets
Equipment: \$10,000
Accounts payable: \$900
Capital Stock: \$1,500
Cash: \$800
Loan payable: \$9,000
Wages payable: \$500
Accounts receivable: \$1,000
Retained earnings: \$3,400
Inventory: \$3,500

Total Assets
Equipments - 10000
Cash- 800
Accounts receivable: \$1,000
Inventory: \$3,500
Total= \$15300

2-2
Total Liabilities - Refer to data in 2-1.
Compute total ...

#### Solution Summary

Response helps in computing total assets, total liabilities, total equity; use accounting equation

\$2.19

## Tanner Company: Compute the Missing Amounts in the Company's Financial Statement

Incomplete financial statements for Tanner Company are given:
Compute the missing amounts on the company's financial statements.
***Full details are available in the 3 attachments.

---------------------------------

Tanner Company
Income Statement
For the Year Ended December 31

Sales......................................................................................................................... \$2,700,000
Cost of goods sold........................................................................................................... ? _
Gross Margin................................................................................................................... ?
Net operating income.................................................................................................... ?
Interest expense............................................................................................................ ____45,000_
Net income before taxes.............................................................................................. ?
Income taxes (40%)....................................................................................................... ______?___
Net income..................................................................................................................... ===========

Tanner Company
Balance Sheet
December 31
Current Assets:
Cash..................................................................................................................... \$ ?
Accounts receivable, net................................................................................. ?
Inventory........................................................................................................... ?__
Total current assets........................................................................................................ \$ ?__
Current liabilities............................................................................................................ \$250,000
Bonds payable, 10%............................................................................................ ?__
Total liabilities................................................................................................................. ____?__
Stockholders' equity:
Common stock, \$2.50 par value................................................................... ?
Retained earnings.......................................................................................... ___?___
Total stockholders' equity.......................................................................................... ___?___
Total liabilities and stockholders' equity................................................................. \$ ?
========

The following information is available about the company:
a. Selected financial ratios computed from the statements above are given below:

Current Ratio........................................................ 2.40
Acid-test ratio...................................................... 1.12
Accounts receivable turnover.......................... 15.0
Inventory turnover............................................. 6.0
Debt-to-equity ratio........................................... 0.875
Times interest earned....................................... 7.0
Earnings per share............................................... \$4.05
Return on total assets........................................ 14%

b. All sales during the year were on account.
c. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change throughout the year.
d. There were no changes in the number of shares of common stock outstanding during the year.
e. Selected balances at the beginning of the current year (January 1) were as follows:

Accounts receivable........................................... \$160,000
Inventory............................................................. \$280,000
Total assets.......................................................... \$1,200,000

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