Question

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XYZ Corporation Adjusted Trial Balance December 31, 2021 Debit Credit Accounts receivable       700 Building 480 Equipment...

XYZ Corporation

Adjusted Trial Balance

December 31, 2021

Debit

Credit

Accounts receivable

      700

Building

480

Equipment

375

Cash

125

Inventory

90

Land

300

Notes receivable

530

Investments

330

Prepaid rent (for the next 2 years)

50

Supplies

20

Trademark

50

Prepaid Insurance (for the next 3 years)

90

Accounts payable

     620

Accumulated depreciation- Equipment

225

Accumulated depreciation- Buildings

180

Total stockholders' equity

1110

Dividends payable

50

Income tax payable

80

Allowance for Doubtful Accounts

55

Notes payable

600

Interest payable

60

Deferred revenue

160

TOTALS

    3,140

      3,140

Additional information and requirements:

Additional information:

1. Land includes land held a possible future plant site $125K and land for the current plant site $175K.

2. The notes receivable are due in 2023. The balance of $530 includes $30 of accrued interest. The next interest payment is due in July 2022.

3. Included in the investments are treasury bills of $70K that were purchased in November 2021 and mature in January, 2022; trading securities of $100 which are expected to be sold within the next year. The balance represents securities expected to be held longer than one year.

4. As of 12/31/21, Stockholders' equity has common stock, $1.00 par value, authorized 300K shares, and issued 150K shares at an average price of $4.50. The remaining balance in stockholders’ equity is retained earnings.

5. The note payable represents a 12% note, with interest paid annually February 28. The note matures in installments of $100 beginning 2/28/22.

6. Deferred revenue will be recognized equally over the next 24 months


1.) Prepare a classified balance sheet for XYZ Corporation at December 31, 2021. Complete the questions on the following page about the balance sheet.

  1. Net accounts receivable                     ________________________
  2. Total current assets                             ________________________
  3. Total investments (long-term) ________________________
  4. Net Buildings                                      ________________________
  5. Total PP&E, net    ________________________
  6. Total intangibles                                 ________________________
  7. Total other assets                                ________________________
  8. Total Assets                                        ________________________
  9. Total Current Liabilities                     ________________________
  10. Total Long-term Liabilities                ________________________
  11. Common Stock                                   _______________________

2.) Calculate the following ratios :

Current ratio =

Debt to equity ratio =

Acid-test (quick) ratio =

Working capital =

Solutions

Expert Solution

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XYZ Corporation
Answer 1
Classified Balance Sheet
Assets Amount $ Amount $
Current Assets
Cash (including treasury bills)       195.00
Trading Securities       100.00
Accounts receivable         700.00
Allowance for uncollectible accounts          (55.00)       645.00
Inventory         90.00
Supplies         20.00
Prepaid rent- current portion         25.00
Prepaid insurance- current portion         30.00
Interest receivable         30.00
Current Assets 1,135.00
Investments
Long Term Investments         160.00
Notes receivable
Non Current Assets       160.00
Plant, Property & Equipment
Land       300.00
Building         480.00
Less: Accumulated Depreciation        (180.00)       300.00
Equipment         375.00
Less: Accumulated Depreciation        (225.00)       150.00
Plant, Property & Equipment       750.00
Intangible Assets
Trademark            50.00
Franchise (net)
Intangible Assets         50.00
Other Assets
Notes receivable         500.00
Prepaid rent- Non current portion            25.00
Prepaid rent- current portion            60.00
Intangible Assets       585.00
Total Assets 2,680.00
Liabilities & Stockholder's Equity
Liabilities
Current Liabilities
Accounts payable         620.00
Dividends payable            50.00
Interest payable            60.00
Income Taxes payable            80.00
Notes payable- Current Portion         100.00
Deferred Revenue- Current Portion            80.00         60.00
Current Liabilities       990.00
Non Current Liabilities
Notes payable         500.00
Unearned Revenue- Non Current Portion            80.00
Non Current Liabilities       580.00
Total Liabilities 1,570.00
Stockholder's Equity
Common stock ( 330K of $ 1 par stock authorized, 150K shares issued and outstanding.)         675.00
Retained earnings         435.00
Total Stockholder's Equity 1,110.00
Total Liabilities & Stockholder's Equity 2,680.00
Answer 2
Current ratio
(Current Assets/ Current Liabilities)              1.15
Debt to equity ratio              1.41
(Total Liabilities/ Total Equity)
Quick assets Amount $
Cash (including treasury bills)         195.00
Trading Securities         100.00
Accounts receivable (net(         645.00
Interest receivable            30.00
Quick assets         970.00
Acid-test (quick) ratio              0.98
(Quick assets/ Current Liabilities)
Working capital         145.00
(Current Assets less Current Liabilities)

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