Chapter 2 (2) - Accounting 151 Section 16 Patrick Leblond...

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Accounting 151 Section 16 Patrick Leblond 09/07/06 Chapter 2 Problems P3A: a) Maxim Enterprises Income Statement For the Year Ended April 30, 2007 Revenues Selling revenues $ 3,600 Expenses Income tax expense $ 165 Interest expense 400 Selling expenses 210 Cost of goods sold 990 Wages expense 700 Depreciation expense 335 Total expense $ 2,800 Net income $ 800 b) Maxim Enterprises Classified Balance Sheet April 30, 2007 Current Assets Cash $ 770 Accounts receivable 810 Inventories 967 Prepaid expenses 12 Short term investment 1,200 Total current assets $ 3,759 Equipment, net of accumulated depreciation 1,220 Land 1,600 Building, net of accumulated depreciation 1,537 Total assets $ 8,116 P7A: a) Wal-Mart Working Capital = $34,421 - $37,418 = ($2,997) Target Working Capital = $12,928 - $8,314 = $4,614 b) Wal-Mart Current Ratio = $34,421/$37,418 = 0.910:1 Target Current Ratio = $12,928/$8,314 = 1.555:1
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Accounting 151 Section 16 Patrick Leblond 09/07/06 c) (P7A) Wal-Mart Debt to Total Assets Ratio = $23,871/$104,912 = 22.8%
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This note was uploaded on 04/29/2008 for the course ACCT 151 taught by Professor Largay during the Spring '07 term at Lehigh University .

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Chapter 2 (2) - Accounting 151 Section 16 Patrick Leblond...

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