Question
In: Accounting
Selected balance sheet accounts for Tibbetts Company on September 30, 2016, are as follows: Cash $...
Selected balance sheet accounts for Tibbetts Company on
September 30, 2016, are as follows:
Cash $ 44,800
Marketable securities 126,000
Accounts receivable, net 154,000
Inventory 175,000
Prepaid expenses 19,600
Total current assets $ 519,400
Accounts payable $ 108,000
Other accrued liabilities 26,400
Short-term debt 48,000
Total current liabilities $ 182,400
Required:
a. Calculate the working capital, current ratio, and acid-test
ratio for Tibbetts Company as of September 30, 2016. (Round "Ratio"
answers to 2 decimal places.)
b. Summarized here are the transactions/events that took place
during the fiscal year ended September 30, 2017.
Credit sales for the year amounted to $336,000. The cost of
goods sold was $218,400.
Collected accounts receivable, $352,800.
Purchased inventory on account, $235,200.
Issued 700 shares of common stock for $25 per share.
Wrote off $9,800 of uncollectible accounts using the allowance
for bad debts.
Declared and paid a cash dividend, $28,000.
Sold marketable securities costing $36,400 for $43,400 in
cash.
Recorded insurance expense for the year, $16,800. The premium
for the policy was paid in June 2016.
Borrowed cash on a short-term bank loan, $14,000.
Repaid principal of $56,000 and interest of $4,200 on a
long-term bank loan.
b-1. Prepare journal entries for the above transactions. (If
no entry is required for a transaction/event, select "No journal
entry required" in the first account field.)
Solutions
Expert Solution
a. Working capital = Current assets - Current liabilities = $519400 - $182400 = $337000
Current ratio = Current assets/Current liabilities = $519400/$182400 = 2.85
Acid-test ratio = Quick assets/Current liabilities = ($44800 + $126000 + $154000)/$182400 = $324800/$182400 = 1.78
b-1.
| No. | Accounts and Explanations | Debit | Credit |
| 1(a) | Accounts receivable | 336000 | |
| Sales revenue | 336000 | ||
| (To record credit sales) | |||
| 1(b) | Cost of goods sold | 218400 | |
| Inventory | 218400 | ||
| (To record the cost of sales) | |||
| 2 | Cash | 352800 | |
| Accounts receivable | 352800 | ||
| (To record collection on account) | |||
| 3 | Inventory | 235200 | |
| Accounts payable | 235200 | ||
| (To record inventory purchased on account) | |||
| 4 | Cash | 17500 | |
| Common stock (700 x $25) | 17500 | ||
| (To record common stock issued) | |||
| 5 | Allowance for bad debts | 9800 | |
| Accounts receivable | 9800 | ||
| (To record write-off of uncollectible accounts) | |||
| 6 | Dividends | 28000 | |
| Cash | 28000 | ||
| (To record cash dividend declared and paid) | |||
| 7 | Cash | 43400 | |
| Marketable securities | 36400 | ||
| Realized gain on sale | 7000 | ||
| (To record sale of marketable securities) | |||
| 8 | Insurance expense | 16800 | |
| Prepaid expenses | 16800 | ||
| (To record insurance expense) | |||
| 9 | Cash | 14000 | |
| Short-term debt | 14000 | ||
| (To record short-term bank loan taken) | |||
| 10 | Long-term debt | 56000 | |
| Interest expense | 4200 | ||
| Cash | 60200 | ||
| (To record repayment of long-term bank loan) |
ekkarill92 answered 1 year agoRelated Solutions
Selected balance sheet accounts for Tibbetts Company on September 30, 2016, are as follows: Cash $...
Selected balance sheet accounts for Tibbetts Company on
September 30, 2016, are as follows:
Cash
$
44,800
Marketable securities
126,000
Accounts receivable, net
154,000
Inventory
175,000
Prepaid expenses
19,600
Total current assets
$
519,400
Accounts payable
$
99,000
Other accrued liabilities
24,200
Short-term debt
44,000
Total current liabilities
$
167,200
a. Calculate the working capital, current
ratio, and acid-test ratio for Tibbetts Company as of September 30,
2016. (Round "Ratio" answers to 2 decimal
places.)
b. Summarized here are the...
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Marketable securities
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Accounts receivable, net
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Inventory
162,500
Prepaid expenses
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Total current assets
$
482,300
Accounts payable
$
81,000
Other accrued liabilities
19,800
Short-term debt
36,000
Total current liabilities
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Selected balance sheet accounts for Tibbetts Company on
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Marketable securities
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Accounts receivable, net
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Inventory
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Prepaid expenses
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Total current assets
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Accounts payable
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90,000
Other accrued liabilities
22,000
Short-term debt
40,000
Total current liabilities
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Calculate the working capital, current ratio, and acid-test
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Effect on transactions on liquidity measures Selected balance sheet accounts for Tibbets Company on September 30,...
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Selected
balance sheet accounts for Tibbets Company on September 30, 2019,
are as follows:
Cash
$48,000.00
Marketable securities
87,000
Accounts receivable, net
129,000
Inventory
135,000
Prepaid expenses
21,000
total current assets
$420,000.00
Accounts Payable
$147,000.00
Other accrued liabilities
33,000
Short-term debt
60,000
total current liabilities
$240,000.00
Required:
a. Calculate the working capital, current ratio,
and acid-test ratio for Tibbetts Company as of Sep 30,2019
b. Summarized here are the transactions/events
that took place during...
Effect on transactions on liquidity measures Selected balance sheet accounts for Tibbets Company on September 30,...
Effect on transactions on liquidity
measures
Selected balance sheet accounts for Tibbets Company on September
30, 2019, are as follows:
Cash $48,000.00
Marketable securities 87,000
Accounts receivable, net 129,000
Inventory 135,000
Prepaid expenses 21,000
total current assets $420,000.00
Accounts Payable $147,000.00
Other accrued liabilities 33,000
Short-term debt 60,000
total current liabilities $240,000.00
Required:
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State Unemployment Tax Payable: Sep. 30 $1,183.40
Federal Unemployment Tax Payable: Sep. 30 $575.32
Employees' Federal Income Tax Payable: Sep. 30 $3,210.85 Prepare
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At September 1, the balance sheet accounts for
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Account payable
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Land
$ 33,000
Account Receivable
1,600
Debbie Capital
??
Building
68,000
Notes Payable
48,000
Cash
10,000
Furniture
18,700
Supplies
6,600
The following transactions occurred during the next two
days:
Debbie invested an additional $22,000 cash in the business. The
accounts payable were paid in full. (No payment was made on the
notes payable.)
Required:
Prepare a balance sheet at September 3, 2015.
Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown...
Wheeling Company is a merchandiser that provided a balance sheet
as of September 30 as shown below:
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Balance Sheet
September 30
Assets
Cash
$
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Accounts receivable
90,000
Inventory
32,400
Buildings and equipment, net of
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214,000
Total assets
$
395,400
Liabilities and
Stockholders’ Equity
Accounts payable
$
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Common stock
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Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown...
Wheeling Company is a merchandiser that provided a balance sheet
as of September 30 as shown below:
Wheeling Company
Balance Sheet
September 30
Assets
Cash
$
74,800
Accounts receivable
114,000
Inventory
48,600
Buildings and equipment, net of depreciation
309,000
Total assets
$
546,400
Liabilities and Stockholders’ Equity
Accounts payable
$
213,900
Common stock
216,000
Retained earnings
116,500
Total liabilities and stockholders’ equity
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546,400
The company is in the process of preparing a budget for October
and has assembled the...
Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown...
Wheeling Company is a merchandiser that provided a balance sheet
as of September 30 as shown below:
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Balance Sheet
September 30
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Cash
$
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Accounts receivable
130,000
Inventory
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Buildings and equipment, net of depreciation
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Liabilities and Stockholders’ Equity
Accounts payable
$
172,200
Common stock
216,000
Retained earnings
148,000
Total liabilities and stockholders’ equity
$
536,200
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