Exam 2: A Further Look at Financial Statements

Equipment is classified on the balance sheet as

Use the following data to calculate the current ratio. Drew's Lawn Service Balance Sheet December 31,2022 Cash \ 2,000 Accounts receivable 300 Supplies 100 Prepaid insurance 900 Equipment \3 3,000 Less: Accumulated depreciation (6,000) 27,000 Internet domain 1,000 Total assets \3 1,300 Accounts payable \ 600 Salaries and wages payable 200 Note payable (due 2024) 22,100 Total liabilities 22,900 Common stock 7,000 Retained earnings 1,400 Total stockholders' equity Total liabilities and stockholders' equity \3 1,300

In a classified balance sheet assets are usually classified as

A liquidity ratio measures the

Liabilities are generally classified on a balance sheet as

The current ratio takes into account the composition of current assets.

The excess of current assets over current liabilities is called working capital.

Using the following balance sheet and income statement data for Castillo Company what is the company's debt to assets ratio? Current assets \ 41,000 Net income \ 48,000 Current liabilities 22,000 Stockholders' equity 75,000 Average assets 210,000 Total liabilities 125,000 Total assets 200,000

Solvency ratios measure the short-term ability of the company to pay its maturing obligations.

Which of the following is a measure of liquidity?

Which of the following is not a current liability?

These are selected account balances on December 31 2022. Land \ 150,000 Land (held for future use) 225,000 Buildings 1,200,000 Inventory 300,000 Equipment 675,000 Furniture 150,000 Accumulated Depreciation 450,000 What is the total amount of property plant and equipment that will appear on the balance sheet?

Using the following balance sheet and income statement data for Castillo Company what is the company's current ratio? Current assets \ 41,000 Net income \ 48,000 Current liabilities 22,000 Stockholders' equity 75,000 Average assets 210,000 Total liabilities 125,000 Total assets 200,000

Use the following data to determine the total dollar amount of assets to be classified as property plant and equipment. Carne Auto Supplies Balance Sheet December 31,2022 Cash \ 0,000 Accounts receivable 100,000 Inventory 140,000 Prepaid insurance 80,000 Stock investments 180,000 Land 190,000 Buildings \ 230,000 Less: Accumulated depreciation (60,000) 170,000 Patent 140,000 Total assets \ 1,070,000 Accounts payable \ 130,000 Salaries and wages payable 20,000 Mortgage payable 180,000 Total liabilities 330,000 Common stock 240,000 Retained earnings 500,000 Total stockholders' equity 740,000 Total liabilities and stockholders' equity \ 1,070,000

Mitchell Corporation has current assets of $1600000 million and current liabilities of $750000.If they pay $350000 of their accounts payable what will their new current ratio be?

Liquidity ratios measure the short-term ability of a company to pay its maturing obligations and meet unexpected needs for cash.

The most important information needed to determine if companies can pay their current obligations is the

Use the following data to calculate the current ratio. Edie's Flomer Shoppe Balance Sheet December 31,2022 Cash \ 126,000 Accounts receivable 120,000 Inventory 210,000 Prepaid insurance 90,000 Stock investments 255,000 Land 285,000 Buildings \ 339,000 Less: Accumulated depreciation (60,000) 279,000 Trademarks 210,000 Total assets \ 1575,000 Accounts payable \ 165,000 Salaries and wages payable 30,000 Mortgage payable 270,000 Total liabilities 465,000 Common stock \ 360,000 Retained earnings 750,000 Total stockholders' equity 1,110,000 Total liabilities and stockholders' equity \ 1,575,000

Long-term creditors are usually most interested in evaluating

Use the following data to determine the total dollar amount of assets to be classified as property plant and equipment. Edie's Flomer Shoppe Balance Sheet December 31,2022 Cash \ 126,000 Accounts receivable 120,000 Inventory 210,000 Prepaid insurance 90,000 Stock investments 255,000 Land 285,000 Buildings \ 339,000 Less: Accumulated depreciation (60,000) 279,000 Trademarks 210,000 Total assets \ 1575,000 Accounts payable \ 165,000 Salaries and wages payable 30,000 Mortgage payable 270,000 Total liabilities 465,000 Common stock \ 360,000 Retained earnings 750,000 Total stockholders' equity 1,110,000 Total liabilities and stockholders' equity \ 1,575,000