ch-3EXERCISE1

ch-3EXERCISE1 - EXERCISES Exercise 3-1 1. Total current...

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EXERCISES 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 3-2 1. c Equipment 10. a Inventories 2. f Accounts payable 11. d _ Patent 3. -a _ Allowance for uncollectible accounts 12. c Land, in use 4. b _ Land, held for investment 13. f _ Accrued liabilities 5. g _ Note payable, due in 5 years 14. a Prepaid rent 6. f Unearned rent revenue 15. h _ Common stock 7. f Note payable, due in 6 months 16. c Building, in use 8. i Income less dividends, accumulated 17. a Cash
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9. b Investment in XYZ Corp., long-term 18. f _ Taxes payable 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
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Exercise 3-4
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JACKSON CORPORATION Balance Sheet At December 31, 2011 Assets Current assets: Cash $ 40,000 Marketable securities 10,000 Accounts receivable 34,000 Inventories 75,000 Prepaid rent 16,000 Total current assets 175,000 Property, plant, and equipment: Machinery $145,000 Less: Accumulated depreciation (11,000) Net property, plant, and equipment 134,000 Intangible assets: Patent 83,000 Total assets $392,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 8,000 Wages payable 4,000 Taxes payable 32,000 Total current liabilities 44,000 Long-term liabilities: Bonds payable 200,000 Shareholders’ equity: Common stock $100,000 Retained earnings 48,000 Total shareholders’ equity 148,000 Total liabilities and shareholders’ equity $392,000
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VALLEY PUMP CORPORATION Balance Sheet At December 31, 2011 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 32,000 Total current assets 211,000 Investments: Marketable securities $22,000 Land 20,000 Total investments 42,000 Property, plant, and equipment: Land 100,000 Buildings 300,000 Equipment 75,000 475,000 Less: Accumulated depreciation (125,000 ) Net property, plant, and equipment 350,000 Intangible assets: Copyright 12,000 Total assets $615,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 65,000 Interest payable 10,000 Unearned revenues 20,000 Note payable 100,000
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ch-3EXERCISE1 - EXERCISES Exercise 3-1 1. Total current...

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