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    Current Ratios, Trial Balances, Net Income

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    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

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    https://brainmass.com/business/trial-balance/current-ratios-trial-balances-net-income-543545

    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