Oriole Company started the year with total assets of $320000 and total liabilities of $260000. During the year the business recorded $635000 in revenues, $335000 in expenses, and dividends of $57000. The net income reported by Oriole Company for the year was
$300000.
$243000.
$180000.
$570000.
If total liabilities increased by $89000 and stockholders’ equity increased by $27000 during a period of time, then total assets must change by what amount and direction during that same period?
$143000 increase
$170000 increase
$116000 increase
$116000 decrease
Bramble Corp. compiled the following financial information as of December 31, 2022:
| Service revenue | $836000 |
| Common stock | 179000 |
| Equipment | 244000 |
| Operating expenses | 743000 |
| Cash | 222000 |
| Dividends | 56000 |
| Supplies | 31000 |
| Accounts payable | 106000 |
| Accounts receivable | 95000 |
| Retained earnings, 1/1/22 | 435000 |
Bramble’s assets on December 31, 2022 are:
$592000.
$1042000.
$488000.
$1432000.
Vaughn Manufacturing compiled the following financial information as of December 31, 2022:
| Service revenue | $1186000 |
| Common stock | 243000 |
| Equipment | 322000 |
| Salaries and wages expense | 366000 |
| Rent expense | 91500 |
| Depreciation expense | 457500 |
| Cash | 279000 |
| Dividends | 84000 |
| Supplies | 38000 |
| Accounts payable | 173000 |
| Accounts receivable | 123500 |
| Retained earnings, 1/1/22 | 580000 |
Vaughn’s total assets at December 31, 2022 are:
$1948500.
$644000.
$762500.
$1342500.
Based on the following data, what are total liabilities?
| Accounts payable | $63000 |
| Accounts receivable | 62000 |
| Cash | 90000 |
| Inventory | 150000 |
| Buildings | 169000 |
| Bonds payable | 504000 |
| Supplies | 9800 |
| Notes payable | 64000 |
| Equipment | 363000 |
$631000
$567000
$568000
$127000
Based on the following data, what is the amount of current assets?
| Accounts payable | $60000 |
| Accounts receivable | 95000 |
| Cash | 65000 |
| Intangible assets | 95000 |
| Inventory | 125000 |
| Long-term investments | 155000 |
| Long-term liabilities | 180000 |
| Short-term investments | 75000 |
| Notes payable | 55000 |
| Property, plant, and equipment | 1300000 |
| Prepaid insurance | 1000 |
$235000
$203000
$236000
$361000
The Concord Corporation has five plants nationwide that cost $240 million. The current fair value of the plants is $400 million. The plants will be reported as assets at
$640 million.
$240 million.
$400 million.
$160 million.
Use the following data to determine the total dollar amount of assets to be classified as current assets.
| Swifty Corporation | |||||
| Balance Sheet | |||||
| December 31, 2022 | |||||
| Cash and cash equivalents | $69500 | Accounts payable | $139000 | ||
| Accounts receivable | 87500 | Salaries and wages payable | 10700 | ||
| Inventory | 137000 | Bonds payable | 171500 | ||
| Prepaid insurance | 86500 | Total liabilities | $321200 | ||
| Stock investments | 176500 | ||||
| Land | 197000 | ||||
| Buildings | $202500 | Common stock | $231800 | ||
| Less: Accumulated depreciation | (68000) | 134500 | Retained earnings | 475000 | |
| Trademarks | 139500 | Total stockholders’ equity | $706800 | ||
| Total assets | $1028000 | Total liabilities and stockholders’ equity | $1028000 |
$243500
$380500
$321200
$557000
Kingbird, Inc. has assets of $4306000, common stock of $1079000, and retained earnings of $666000. What are the creditors’ claims on their assets?
$4745000
$1875000
$2561000
$3891000
Using the following balance sheet and income statement data, what is the current ratio?
| Current assets | $33000 | Net income | $41500 | |
| Current liabilities | 14200 | Stockholders’ equity | 76800 | |
| Average assets | 159900 | Total liabilities | 41100 | |
| Total assets | 118000 |
Average common shares outstanding was 15700.
2.8 : 1
2.7 : 1
0.4 : 1
2.3 : 1
The Bonita Vista Golf & Country Club details the following accounts in its financial statements.
Classify each of the following accounts as an asset, liability, stockholders’ equity, revenue, or expense item.
| Accounts | Classifications |
| Accounts payable | Liability |
| Accounts receivable | Asset |
| Equipment | Asset |
| Sales revenue | Revenue |
| Service revenue | Revenue |
| Inventory | Asset |
| Mortgage payable | Liability |
| Supplies expense | Expense |
| Rent expense | Expense |
| Salaries and wages expense | Expense |
The following items and amounts were taken from Crane Company’s 2022 income statement and balance sheet.
| Name of Accounts | Classifications | Amount |
| Cash | Asset | $ 94,000 |
| Retained earnings | Stockholders’ equity | 122,300 |
| Cost of goods sold | Expense | 437,100 |
| Salaries and wages expense | Expense | 116,200 |
| Prepaid insurance | Asset | 7,900 |
| Inventory | Asset | 64,400 |
| Accounts receivable | Asset | 89,200 |
| Sales revenue | Revenue | 582,500 |
| Notes payable | Liability | 6,500 |
| Accounts payable | Liability | 56,200 |
| Service revenue | Revenue | 5,300 |
| Interest expense | Expense | 1,830 |
In each case, identify whether the item is an asset, liability, stockholders’ equity, revenue, or expense item.
On June 1, 2022, Carla Vista Co. was started with an initial investment in the company of $20,160 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2022, and the revenues and expenses for the month of June, its first month of operations:
| Cash | $ 5,450 | Notes payable | $13,700 | |||
| Accounts receivable | 4,270 | Accounts payable | 770 | |||
| Service revenue | 8,400 | Supplies expense | 960 | |||
| Supplies | 2,438 | Maintenance and repairs expense | 650 | |||
| Advertising expense | 400 | Utilities expense | 250 | |||
| Equipment | 26,000 | Salaries and wages expense | 1,100 | |||
| Common stock | 20,160 |
During June, the company issued no additional stock but paid dividends of $1,512.
Prepare an income statement for the month of June.
| Carla Vista Co. | ||
| Income Statement | ||
| For the month of June | ||
| Revenue: | ||
| Service revenue | 8,400 | |
| Total revenue | 8,400 | |
| Operating expenses: | ||
| Supplies expense | 960 | |
| Maintenance and repairs expense | 650 | |
| Advertising expense | 400 | |
| Utilities expense | 250 | |
| Salaries and wages expense | 1,100 | |
| Total operating expenses | 3,360 | |
| Net Income | 5,040 |
Prepare a retained earnings statement for the month of June. (List items that increase retained earnings first.)
| Carla Vista Co. | |
| Retained earnings statement | |
| For the month of June | |
| Beginning balance of retained earnings | – |
| Net income for the year | 5,040 |
| Dividend paid | -1,512 |
| Ending balance of retained earnings | 3,528 |
Prepare a balance sheet at June 30, 2022. (List assets in order of liquidity.)
| Carla Vista Co. | ||
| Balance Sheet | ||
| For the month of June | ||
| Current assets: | ||
| Cash | 5,450 | |
| Accounts receivable | 4,270 | |
| Supplies | 2,438 | |
| Total current assets | 12,158 | |
| Noncurrent assets: | ||
| Equipment | 26,000 | |
| Total assets | 38,158 | |
| Current liabilities: | ||
| Accounts payable | 770 | |
| Notes payable | 13,700 | |
| Total current liabilities | 14,470 | |
| Noncurrent liabilities | – | |
| Total liabilities | 14,470 | |
| Equity | ||
| Common stock | 20,160 | |
| Retained earnings | 3,528 | |
| Total equity | 23,688 | |
| Total liabilities and equity | 38,158 |
Classify each of the following financial statement items taken from Ming Corporation’s balance sheet.
Accounts payable = Current liability
Accounts receivable = Current assets
Accumulated depreciation—equipment = Current assets
Buildings = Property, Plant and Equipment
Cash = Current assets
Interest payable = Current liabilities
Goodwill = Intangible assets
Income taxes payable = Current liabilities
Inventory = Current assets
Stock investments (to be sold in 7 months) = Current assets
Land (in use) = Property, Plant and Equipment
Mortgage payable = Long term liabilities
Supplies = Current assets
Equipment = Property, Plant and Equipment
Prepaid rent = Current assets
The chief financial officer (CFO) of Oriole Company requested that the accounting department prepare a preliminary balance sheet on December 30, 2022, so that the CFO could get an idea of how the company stood. He knows that certain debt agreements with its creditors require the company to maintain a current ratio of at least 2:1. The preliminary balance sheet is as follows.
| Oriole Company Balance Sheet December 30, 2022 | ||||
| Current assets | ||||
| Cash | $26,200 | |||
| Accounts receivable | 27,100 | |||
| Prepaid insurance | 6,100 | $ 59,400 | ||
| Equipment (net) | 201,400 | |||
| Total assets | $260,800 | |||
| Current liabilities | ||||
| Accounts payable | $ 21,000 | |||
| Salaries and wages payable | 12,000 | $ 33,000 | ||
| Long-term liabilities | ||||
| Notes payable | 76,400 | |||
| Total liabilities | 109,400 | |||
| Stockholders’ equity | ||||
| Common stock | 100,000 | |||
| Retained earnings | 51,400 | 151,400 | ||
| Total liabilities and stockholders’ equity | $260,800 |
Part 1
(a)
Calculate the current ratio and working capital based on the preliminary balance sheet. (Round current ratio to 1 decimal place, e.g. 0.7 : 1.)
| Current ratio | enter current ratio rounded to 1 decimal place | 1.8:1 | ||
| Working capital | $ | enter a dollar amount | 26,400 |
Save for Later
Attempts: 0 of 15 used
Submit Answer
Part 2
(b)
Based on the results in (a), the CFO requested that $21,000 of cash be used to pay off the balance of the accounts payable account on December 31, 2022. Calculate the new current ratio and working capital after the company takes these actions. (Round current ratio to 1 decimal place, e.g. 0.7 : 1.)
| Current ratio | enter current ratio rounded to 1 decimal place | 3.2:1 | ||
| Working capital | $ | enter a dollar amount | 26,400 |
These items are taken from the financial statements of Pharoah Company for 2022.
| Retained earnings (beginning of year) | $32,270 | |
| Utilities expense | 2,170 | |
| Equipment | 62,900 | |
| Accounts payable | 16,580 | |
| Cash | 13,930 | |
| Salaries and wages payable | 5,720 | |
| Common stock | 22,100 | |
| Dividends | 12,000 | |
| Supplies | 2,900 | |
| Debt investment (long-term) | 6,400 | |
| Trademarks | 2,200 | |
| Service revenue | 69,600 | |
| Prepaid insurance | 6,220 | |
| Maintenance and repairs expense | 1,630 | |
| Depreciation expense | 3,440 | |
| Accounts receivable | 12,970 | |
| Insurance expense | 2,360 | |
| Salaries and wages expense | 38,580 | |
| Accumulated depreciation—equipment | 21,430 |
Part 1
Prepare an income statement for the year ended December 31, 2022. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
| PHAROAH COMPANY Income Statement choose the accounting period For the Year Ended December 31, 2022December 31, 2022For the Month Ended December 31, 2022 |
Attempts: 0 of 15 used
| Revenue: | ||
| Service revenue | 69,600 | |
| Total revenue | 69,600 | |
| Expenses: | ||
| Utilities expense | 2,170 | |
| Maintenance and repairs expense | 1,630 | |
| Depreciation expense | 3,440 | |
| Insurance expense | 2,360 | |
| Salaries and wages expense | 38,580 | |
| Total expense | 48,180 | |
| Net Income | 21,420 |
Submit Answer
Part 2
Prepare a retained earnings statement for the year ended December 31, 2022. (List items that increase retained earnings first.)
| PHAROAH COMPANY Retained Earnings Statement choose the accounting period For the Month Ended December 31, 2022December 31, 2022For the Year Ended December 31, 2022 |
Attempts: 0 of 15 used
| Beginning balance of retained earnings | 32,270 |
| Net income for the year | 21,420 |
| Dividend paid | -12,000 |
| Ending balance of retained earnings | 41,690 |
Submit Answer
Part 3
Prepare a classified balance sheet as of December 31, 2022. (List Current Assets in order of liquidity.)
| PHAROAH COMPANY Balance Sheet choose the accounting period For the Year Ended December 31, 2022For the Month Ended December 31, 2022December 31, 2022 |
| Assets |
Submit Answer
| Current assets: | ||
| Cash | 13,930 | |
| Supplies | 2,900 | |
| Prepaid insurance | 6,220 | |
| Accounts receivable | 12,970 | |
| Total current assets | 36,020 | |
| Noncurrent assets: | ||
| Equipment | 62,900 | |
| Accumulated depreciation—equipment | -21,430 | |
| Debt investment (long-term) | 6,400 | |
| Trademarks | 2,200 | |
| Total noncurrent assets | 50,070 | |
| Total assets | 86,090 | |
| Current liabilities: | ||
| Accounts payable | 16,580 | |
| Salaries and wages payable | 5,720 | |
| Total current liabilities | 22,300 | |
| Noncurrent liabilities | – | |
| Total liabilities | 22,300 | |
| Equity | ||
| Common stock | 22,100 | |
| Retained earnings | 41,690 | |
| Total equity | 63,790 | |
| Total liabilities and equity | 86,090 |
