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Current Ratios, Trial Balances, Net Income

Using the following balance sheet and income statement data, what is the current ratio?
Current assets $14,000 Net income $24,000
Current liabilities 8,000 Stockholders' equity 42,000
Average assets 80,000 Total liabilities 18,000
Total assets 60,000
Average common shares outstanding was 10,000.

Answer:
1.75 : 1
1.6 : 1
0.57 : 1
3.3 : 1

Use the following data to calculate the current ratio.

Eddy Auto Supplies
Balance Sheet
December 31, 2012
Cash $50,000 Accounts Payable $55,000
Prepaid Insurance 30,000 Salaries Payable 10,000
Accounts Receivable 40,000 Mortgage Payable 90,000
Inventory 70,000 Total Liabilities $155,000
Land held for Investment 80,000
Land 75,000
Buildings $110,000 Common Stock $120,000
Less Accumulated Retained Earnings 250,000
Depreciation (20,000) 90,000 Total Stockholders' Equity $370,000
Trademarks 70,000 Total Liabilities and
Total Assets $525,000 Stockholders' Equity $525,000

Answer:
1.85 : 1.
2.92 : 1.
3.45 : 1.
1.38 : 1.

Winrow Company showed the following balances at the end of its first year: What did Winrow Company show as total credits on its trial balance?

Cash $9,000
Prepaid insurance 500
Accounts receivable 2,500
Accounts payable 2,000
Notes payable 3,000
Common stock 5,000
Dividends 500
Revenues 15,000
Expenses 12,500

Answer:
$25,500
$25,000
$24,500
$26,000

Based on the account balances below, what is the total of the debit and credit columns of the adjusted trial balance?

Service revenue $3,300 Equipment $6,400
Cash 1,525 Prepaid insurance 1,225
Unearned revenue 5,320 Depreciation expense 640
Salary expense 1,050 Accum. depreciation 1,280
Common stock 390 Retained earnings 550

Answer:
$9,150
$10,840
$9,560
$10,430

The following is selected information from L Corporation for the fiscal year ending October 31, 2011.

Cash received from customers $300,000
Revenue earned 370,000
Cash paid for expenses 170,000
Cash paid for computers on November 1, 2010 that will
be used for 3 years 48,000
Expenses incurred including any depreciation 216,000
Proceeds from a bank loan, part of which was used to
pay for the computers 100,000

Based on the accrual basis of accounting, what is L Corporation's net income for the year ending October 31, 2011?

Answer:
$184,000
$154,000
$152,000
$170,000

Given the following adjusted trial balance: Net income for the year is:

Debit Credit
Cash &1,562
Accounts receivable 2,098
Inventory 3,124
Prepaid rent 86
Property, plant & equipment 300
Accumulated depreciation 52
Accounts payable 82
Unearned revenue 122
Common stock 206
Retained earnings 6,610
Service revenue 268
Interest revenue 56
Salary expense 160
Travel expense 66
Total $7,396 $7,396

Answer:
$98
$270
$324
$496

Solution Preview

Your analysis is in Excel, attached. For each problem, shown in order, ...

Solution Summary

Your analysis is in Excel, attached. For each problem, shown in order, you have guidance that shows you the process such as the ratios, what is included in net income and the debit or credit nature of each account (and the trial balance totals). This shows you the strategy for problems like this.

$2.19