20. Required: Prepare classified Balance Sheet and make evaluations by ratios: 5
ID: 2410305 • Letter: 2
Question
20. Required: Prepare classified Balance Sheet and make evaluations by ratios: 50000, Intangible assets 10000, Accounts payable 6000, Wages payable 4000, Unearned revenue 10000, m payable 40000, Bonds payable 20000, Common stock 100000, Retained earnings 20000, coGs 210000, operating ccounts receivable 10000, inventory 30000, supplies 5000,Equipment 50000, land 40000, Building ortgage expense 70000, Sales 300000. Find the following ratios: WC (Working Capital), QR (Current Ratio), DE (DEBT ratio), ROE (Return on Equity): PM (Profit margin) 21. Classify transactions according to operating, investing, and financing activities. Cash Flow Classification Effect on Cash Operatin Investing Financing Transactio Inc Dec. |Eflect Activity Investing netivity Activity Activity Non-Cash Transaction No a. Earned a net income b. Declared and paid cash dividend. c. Issued stock for cash. d. Purchased a long-term investment with cash e. Retired long-term debt by issuing stock, f. Paid accounts payable gPurchased inventory h. Purchased a one-year insurance policy i. Sold marketable securities at a gain, i. Sold a machine at a loss k. Retired fully depreciated equipment 1. Paid interest on debt. m. Purchased marketable securities. n. Received dividend income. o. Received cash on account. p. Converted bonds to common stock q. Purchased short-term, ninety-dayExplanation / Answer
Classified Balance Sheet
Assets
Current Assets
Cash
5000
Accounts Receivable
10000
Inventory
30000
Supplies
5000
Total Current Assets
50000
Fixed Assets
Equipment
50000
Land
40000
Building
50000
Total Fixed Assets
140000
Other Assets
Intangible Assets
10000
Total Other Assets
10000
Total Assets
200000
Liabilities
Current Liabilities
Accounts Payable
6000
Accrued Expenses
4000
Unearned Revenue
10000
Total Current Liabilities
20000
Long term Liabilities
Mortgages Payable
40000
Bonds Payable
20000
Total Long Term Liabilities
60000
Owner's Equity
Common Stock
100000
Retained Earnings
20000
Total Owners Equity
120000
Total liabilities and Owner's equity
200000
Working Capital Ratio
Current Assets/current Liabilities
2.5
Quick Ratio
Cash/Current Liabilities
0.25
Dept equity ratio
Debt/Equity
0.5
ROE
Income/Shareholder's Capital
16.67%
Profit Margin ratio
Net Income/Net sales
6.67%
Transactions
Classification of transaction
Effect on cash
a
Operating
Inc.
b
Financing
Dec
c
Financing
Inc.
d
Investing
Dec
e
Non cash Transaction
No effect
f
Operating
Dec
g
Operating
Dec
h
Operating
Dec
i
Investing
Inc.
j
Investing
Inc.
k
Non cash Transaction
No effect
l
Operating
Dec
m
Investing
Dec
n
Investing
Inc.
o
Operating
Inc.
p
Non cash Transaction
No effect
q
Financing
Inc.
Classified Balance Sheet
Assets
Current Assets
Cash
5000
Accounts Receivable
10000
Inventory
30000
Supplies
5000
Total Current Assets
50000
Fixed Assets
Equipment
50000
Land
40000
Building
50000
Total Fixed Assets
140000
Other Assets
Intangible Assets
10000
Total Other Assets
10000
Total Assets
200000
Liabilities
Current Liabilities
Accounts Payable
6000
Accrued Expenses
4000
Unearned Revenue
10000
Total Current Liabilities
20000
Long term Liabilities
Mortgages Payable
40000
Bonds Payable
20000
Total Long Term Liabilities
60000
Owner's Equity
Common Stock
100000
Retained Earnings
20000
Total Owners Equity
120000
Total liabilities and Owner's equity
200000
Working Capital Ratio
Current Assets/current Liabilities
2.5
Quick Ratio
Cash/Current Liabilities
0.25
Dept equity ratio
Debt/Equity
0.5
ROE
Income/Shareholder's Capital
16.67%
Profit Margin ratio
Net Income/Net sales
6.67%
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