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SOLUTIONS TO REVIEW EXERCISES RE4-1 (1) Assets-C (2) Liabilities-A (3) Stockholders’ Equity-B RE4-2 Current Assets* Cash $  1,500 Marketable securities     3,000 Accounts receivable $ 7,600 Less:  Allowance for doubtful accounts      (1,100     )     6,500 Inventories   23,600 Prepaid rent     2,400 Total current assets $37,000 *Note: Accounts payable is not included in the current assets section of the balance sheet. RE4-3 Current Liabilities* Accounts payable $  7,200 Salaries payable     5,800 Income taxes payable     4,000 Dividends payable        750 Short-term notes payable     2,500 Total current liabilities $20,250 *Note: Investment in held-to-maturity bonds is not included in the current liabilities section of the  balance sheet. RE4-4 Working capital = Current assets – Current liabilities Working capital = $37,000 - $20,250 Working capital = $16,750 RE4-5
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This note was uploaded on 10/12/2011 for the course AC300 01 taught by Professor Smith during the Spring '11 term at Kaplan University.

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