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Dominion Co, Romania Co, Zayre Company accounting questions

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1)Dominion Company Balance Sheet As of December 31st, 2006

Current Assets: Current Liabilities:

Cash $10,00 Accounts Payable $150,000
Accounts Receivable $90,000 Taxes Payable $20,000
Inventory $135,000 Interest Payable $10,000
Prepaid Insurance $15,000 $180,000

$250,000

Long-term Assets: Long-term Liabilities:

Equipment: $150,000 Notes Payable $50,000
Buildings $250,000 Bonds Payable $250,000
Land $50,000 $300,000
Goodwill $50,000 Total Liabilities $480,000
$500,000
Total Assets $750,000 Stockholder's Equity:
Common Stock $100,000
Retained Earnings $170,000
Stockholder's Equity $270,000
Total Liabilities and
Stockholders Equity $750,000

What is the amount of Dominion's working capital?
a. $270,000.
b. $250,000.
c. $100,000.
d. $70,000.

What is Dominion's debt-to-equity ratio?
a. 1.11 to 1.0
b. 1.78 to 1.0
c. .64 to 1.0
d. .72 to 1.0

What is Dominion's current ratio?
a. 1.39 to 1.0
b. 1.80 to 1.0
c. .56 to 1.0
d. .72 to 1.0

What is Dominion's quick ratio
a. 1.39 to 1.0
b. 1.80 to 1.0
c. .56 to 1.0
d. .72 to 1.0

2)Romania Co. reported utilities expense of $15,000 in 2007. Utilities payable was $4,000 on Jan. 1, 2007, and $3,000 on December 31, 2007. How much cash to Romania pay for utilities during 2007?

a. $15,000.
b. $16,000.
c. $17,000.
d. $19,000.

3) The following account balances are available for Zayre Company

December 31, 2005 December 31, 2006

Equipment $500,000 $600,000
Accumulated Depreciation $200,000 $240,000

During 2006 Zayre Company sold equipment to $65,000 they had originally cost $80,000. At the time of the sale this equipment had accumulated depreciation of $30,000. How much equipment did Zayre purchase during 2006?
a. $110,000.
b. $140,000.
c. $150,000.
d. $180,000.

Attachments

Solution Preview

1)Dominion Company Balance Sheet As of December 31st, 2006

Current Assets: Current Liabilities:

Cash $10,000 Accounts Payable $150,000
Accounts Receivable $90,000 Taxes Payable $20,000
Inventory $135,000 Interest Payable $10,000
Prepaid Insurance $15,000 $180,000

$250,000

Long-term Assets: Long-term Liabilities:

Equipment: $150,000 Notes Payable $50,000
Buildings $250,000 Bonds Payable $250,000
Land $50,000 $300,000
Goodwill $50,000 Total Liabilities $480,000
$500,000
Total Assets $750,000 Stockholder's Equity:
Common ...

Solution Summary

This solution is comprised of a detailed explanation to answer what is the amount of Dominion's working capital, debt-to-equity, current and quick ratio, how much cash to Romania pay for utilities during 2007, and how much equipment did Zayre purchase during 2006.

$2.19