Question

"Problem 13-20B Supply missing balance sheet numbersRustin Craft discovered a piece of wet and partially burned balance sheet after his office was destroyed by fire. He could recall a current ratio of 1.75 and a debt to assets ratio of 45 percent.AssetsCurrent assets Cash Accounts receivable Prepaid expenses Long-term assets Building Less: Accumulated depreciation Total assets Inventory Total current assets Total long-term assets $ 150,000 (A)252,000 54,000 (B)Liabilities and Stockholders’ EquityLiabilities Current liabilities Long-term liabilities Stockholders’ equity Common stock Retained earnings Total liabilities and stockholders’ equity Accounts payable Notes payable (C)(180,000)1,080,000$ (D)Income tax payable Total current liabilities Bonds payable Mortgage payable Total liabilities LO 13-5$ 252,000 (E)108,000 480,000 RequiredComplete the balance sheet by supplying the missing amounts.

Answer 1

Balance Sheet with missing amount -

Assets
Current assets
Cash	150000	150000
Account receivable	(A)	384000	=840000-150000-252000-54000
Inventory	252000	252000
prepaid expenses	54000	54000
Total current assets	(B)	840000	Calculation below
Long term assets
Building	( C )	1260000	=1080000+180000
Less Accumulated Depreciation	-180000	-180000
Total long trem assets	1080000	1080000
Total assets	(D)	1920000	=840000+1080000
Liabilities and stock holder equity
Liabilities
Current laibilities
Account payable	252000	252000
Notes paybale	( E )	120000	=480000-108000-252000
Income tax payable	108000	108000
Total current liabilities	480000	480000
Long term liabilities
Bond payble	270000	270000
Mortgage payable	(F)	114000	=864000-480000-270000
Total liabilities	(G)	864000	Calculation below
Stock holder equity
Common stock	540000	540000
retained earnings	(H)	516000	=1056000-540000
Total Stock holder equity	(I)	1056000	=1920000-864000
Total Liabilities and stock holder equity	(J)	1920000	Same as Total assets

Calculation

Current ratio = Current assets/current liabilities

Thus, 1.75 = current asset/480000

Current asset = 1.75*480000 = $840,000

Debt to asset ratio - Total liabilities /Total assets = 45%

Thus, 45% = Total liabilities/1920000

Total liabilities = 45% * 1920000 = $864,000