Question

Using the following information, fill in the balance sheet below, and then answer questions 6 - 10 Green Co. began operation on January 1, 2011. On January 1, 2011, the company purchased $9,500 of Equipment. Green has not purchased any additional equipment since this initial purchase, nor have they sold any equipment. This equipment is being depreciated on a straight-line basis to a $500 salvage value over an estimated depreciable life of 10 years. The following is a list of some of the income statement accounts (for the period January 1, 2017 to December 31, 2017), some of the balance sheet accounts (on December 31, 2017) and a few financial ratios for Green Co. (for the year ending December 31, 2017). Sales = 10,000 Cash = 120 Tax rate = 25% Accruals = 120 Times interest earned = 5 Acct. Payable Days = 30 Average collection period = 36 days Gross profit margin = 25% Inventory turnover ratio = 6 Operating expenses (excl. dep.) = $900 Current ratio = 2.0 Dividends paid = 80 Debt ratio = 25% NOTES: In 2017, 80% of Green Company sales were on credit; the remainder were cash sales. The average collection period was calculated using a 360-day year. Use COGS/Inventory for inventory turnover ratio formula. Retained earnings as of December 31, 2016 = $2,000. Use Common Stock as a plug figure to make your balance sheet balance. Use year end numbers for ratios that involve both B/S and I/S (instead of average between two years). Cash Accounts receivable Inventory Current assets Gross fixed assets (Accumulated depreciation) Net fixed assets __________ __________ __________ __________ __________ __________ __________ Notes payable Accounts payable Accruals Current liabilities Long-term Debt Total liabilities Common stock Retained earnings __________ __________ __________ __________ __________ __________ __________ __________ Total assets __________ Total liabilities & Equity __________ Green Co. Balance Sheet For the Year ending December 31, 2017 2 6. Current assets = ____________ 7. Total assets = ____________ 8. Current liabilities = ____________ 9. Total liabilities = ____________

Answer 1