2008 Acct 304 Ch 3 Homework Key

2008 Acct 304 Ch 3 Homework Key - Exercise 3-1 1. Total...

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Unformatted text preview: Exercise 3-1 1. Total current assets Current liabilities = $44,000 + 15,000 + 1,000 (accrued interest) = $60,000 Since the current ratio is 1.5:1, current assets = 1.5 x $60,000 = $90,000 2. Short-term investments $90,000 - 5,000 - 20,000 - 60,000 = $5,000 3. Retained earnings Current assets + Noncurrent assets = Current liabilities + Long-term liabilities + Paid-in capital + Retained earnings (RE) $90,000 + 120,000 = $60,000 + 30,000 (Note payable) + 100,000 + RE RE = $20,000 Exercise 3-3 1. f Accrued interest payable 10. a Supplies 2. d Franchise 11. c Machinery 3.-c Accumulated depreciation 12. c Land, in use 4. e _ Prepaid insurance, for 2011 13. f _ Unearned revenue 5. g Bonds payable, due in 10 years 14. d _ Copyrights 6. f Current maturities of long-term debt 15. h _ Preferred stock 7. f Note payable, due in 3 months 16. b _ Land, held for speculation 8. b Long-term receivables 17. a Cash equivalents 9. b Bond sinking fund, will be used to 18. f _ Wages payable retire bonds in 10 years Exercise 3-5 Exercise 3-9 VALLEY PUMP CORPORATION Balance Sheet At December 31, 2009 Assets Current assets: Cash ................................................................................. $ 25,000 Marketable securities ...................................................... 22,000 Accounts receivable, net of allowance for uncollectible accounts of $5,000 ............................... 51,000 Inventories ....................................................................... 81,000 Prepaid expenses .............................................................Prepaid expenses ....
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This note was uploaded on 10/28/2008 for the course ACCT 304 taught by Professor Ed during the Spring '08 term at Brookdale.

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2008 Acct 304 Ch 3 Homework Key - Exercise 3-1 1. Total...

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