Financial Accounting

Essay text:

Given: Current Ratio = 2.2:1; Current Asset = $33,000, Non-current Asset = $55,000; Liabilities = $15,000 Current Liabilities = Current Assets / Ratio Current Liabilities = $33,000/2.2 Current Liabilities = $15,000 OE = Total Assets - Total Liabilities OE = $88,000 - $15,000 OE = $73,000 2-1 E. Given: Non-current Assets = $60,000; Total Assets = $95,000; Current Assets = $35,000; OE = $70,000 Current Liabilities = $95,000 - $70,000 Current Liabilities = $25,000 Current Ratio = $35,000 / $25,000 Current Ratio = 1.4:1 2-2 |J.L. Gregory Company | |Balance Sheet As of | |June 30 | | | | | | | | | | | | | | | | | | | | | | | | | |ASSETS | | | |LIABILITIES AND OWNER'S EQUITY | | | | | | | | | | | |Current Assets | | | |Current Liabilities | | | |Cash |$89,000 | | |Accounts Payable |$241,000 | | |Marketable Securities |$379,000 | | |Bonds Payable |$700,000 | | |A/C Receivables |$505,000 | | |Accrued Expenses |$107,000 | | |Inventories |$513,000 | | |Notes Payable |$200,000 | | | | | | |Tax Liabilities |$125,000 | | | | | | | | | | |Total Current Assets | |$1,486,000 | |Total Current Liabilities | |$1,373,000 | | | | | | | | | | | | | | | | | |Properties, Plant and Equipment | | | |Shareholder's Equity | | | |Land | |$230,000 | |Paid-in Capital |$1,000,000 | | |Building and Equipment |$1,881,000 | | |Retained Earnings |$620,000 | | |Less: Accumulated Depreciation |$924,000 |$957,000 | | | | | |Net: Properties, Plant and Equipment | |$1,187,000 | |Total Shareholder's Equity | |$1,620,000 | | | | | | | | | | | | | | | | | |Other Assets | | | | | | | |Investment in the Peerless Company | |$320,000 | | | | | | | | | | | | | | | | | | | | | |Total Assets | |$2,993,000 | |Total Liabilities and Shareholder's Equity |$2,993,000 | Retained Earnings = Assets – (Liabilities + Paid-in Capital) = $2,993,000 – ($1,373,000 + $1,000,000) = $2,993,000 – $2,373,000 = $620,000 2-3 |1 |Increase in asset; increas in owner's equity | |2 |Decrease in Liabilities; increase in owner's equity | |3 |Decrease in asset | |4 |Increase in asset | |5 |Increase in liabilities | |6 |Increase in asset | |7 |Increase in asset | |8 |No effect since it is only a declaration | |9 |Decrease in owner's equity | |10 |Decrease in owner's equity | 2-4 2-5 2-6 |Brian Company | |Balance Sheet As of | |December 31 | | | | | | | | | |ASSETS | | | |LIABILITIES | | | | | | | | | | | |Current Assets | | | |Current Liabilities | | | |Cash |$2,000 | | |Accounts Payable |$5,000 | | |A/C Receivables |$7,000 | | |Current Portion of Bonds Payable |$2,000 | | |Marketable Securities |$3,500 | | |Wages Payable |$1,500 | | |Plant & Equipment |$8,500 | | | | | | | | | | | | | | |Total Current Assets | |$21,000 | |Total Current Liabilities | |$8,500 | | | | | | | | | |Other Assets | | | |Other Liabilities | | | |Long - Term Investments | |$1,500 | |Bonds Payable | |$8,000 | | | | | | | | | | | | | | | | | |Total Assets | |$22,500 | |Total Liabilities | |$16,500 | | | | | | | | | | | | | | | | | | | | | | | | | |Current Ratio : 2...