Exam 2: A Further Look at Financial Statements

Profitability means having enough funds on hand to pay debts when they fall due.

Use the following data to determine the total dollar amount of assets to be classified as investments. Koonce Office Supplies Balance Sheet December 31,2022 Cash \ 195,000 Accounts receivable 150,000 Inventory 165,000 Prepaid insurance 90,000 Stock investments 255,000 Land 270,000 Buildings \3 15,000 Less: Accumulated depreciation (60,000) 255,000 Trademarks 210,000 Total assets \ 1590,000 Accounts payable \ 210,000 Salaries and wages payable 30,000 Mortgage payable 240,000 Total liabilities 480,000 Common stock 360,000 Retained earnings 750,000 Total stockholders' equity 1,110,000 Total liabilities and stockholders' equity \ 1590,000

The operating cycle of a company is the average time that is required to go from cash to

Working capital is total assets less total liabilities.

Using the following balance sheet and income statement data for Castillo Company what percentage of the company is financed with equity? 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

Kingery Corporation has current assets of $1800000 and current liabilities of $750000.If they pay $350000 of their accounts payable what will their new current ratio be?

Based on the following data what is the amount of working capital? Accounts payable. \6 4,000 Accounts receivable 114,000 Cash. 70,000 Intangible assets. 100,000 Inventory. 138,000 Long-term investments. 160,000 Long-term liabilities. 200,000 Short-term investments. 80,000 Notes payable (short-term) 56,000 Property, plant, and equipment. 1,340,000 Prepaid insurance. 2,000

An intangible asset

Working capital is calculated by taking

Use the following data to calculate the current ratio. 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

Which of the following is not considered a measure of liquidity?

Using the following balance sheet and income statement data what is the current ratio? Current assets \ 32,000 Net income \ 42,000 Current liabilities 16,000 Stockholders' equity 78,000 Average assets 160,000 Total liabilities 42,000 Total assets 120,000

Which of the following is not classified properly as a current asset at December 31 2022?

The current ratio helps users determine if a company can meet its near-term obligations.

The current ratio includes long-term investments in the numerator.

Use the following data to determine the total dollar amount of assets to be classified as investments. 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

The relationship between current assets and current liabilities is important in evaluating a company's

Use the following data to calculate the current ratio. Koonce Office Supplies Balance Sheet December 31,2022 Cash \ 195,000 Accounts receivable 150,000 Inventory 165,000 Prepaid insurance 90,000 Stock investments 255,000 Land 270,000 Buildings \3 15,000 Less: Accumulated depreciation (60,000) 255,000 Trademarks 210,000 Total assets \ 1590,000 Accounts payable \ 210,000 Salaries and wages payable 30,000 Mortgage payable 240,000 Total liabilities 480,000 Common stock 360,000 Retained earnings 750,000 Total stockholders' equity 1,110,000 Total liabilities and stockholders' equity \ 1590,000

Use the following data to determine the total dollar amount of assets to be classified as investments. 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