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 2 years ago
Next > < Previous

Related 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...
Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: Cash $...
Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: Cash $ 41,600 Marketable securities 117,000 Accounts receivable, net 143,000 Inventory 162,500 Prepaid expenses 18,200 Total current assets $ 482,300 Accounts payable $ 81,000 Other accrued liabilities 19,800 Short-term debt 36,000 Total current liabilities $ 136,800 Required: Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019. Summarized here are the transactions/events that took place during the fiscal year...
Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: Cash $...
Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: Cash $ 32,000 Marketable securities 90,000 Accounts receivable, net 110,000 Inventory 125,000 Prepaid expenses 14,000 Total current assets $ 371,000 Accounts payable $ 90,000 Other accrued liabilities 22,000 Short-term debt 40,000 Total current liabilities $ 152,000 Required: Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019. Summarized here are the transactions/events that took place during the fiscal year...
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: 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: a. Calculate the working capital, current ration, and acid-test ratio for Tibbetts Company as of Sep 30,2019 b. Summarized here are the transactions/events that took place during...
On September 30, Hilltop Company's selected payroll accounts are as follows: FICA Taxes Payable: Sep. 30...
On September 30, Hilltop Company's selected payroll accounts are as follows: FICA Taxes Payable: Sep. 30 $2,314.84 (employer) and Sep. 30 $2,314.84 (employee) 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 general journal entries to record the following: Oct. 15 Payment of federal tax deposit of FICA taxes and the federal income tax. Oct. 31 Payment of state unemployment tax. Oct. 31 Payment of federal...
At September 1, the balance sheet accounts for Debbie’s Restaurant were as follows: Account payable $...
At September 1, the balance sheet accounts for Debbie’s Restaurant were as follows: Account payable $ 3,800 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: Wheeling Company Balance Sheet September 30 Assets Cash $ 59,000 Accounts receivable 90,000 Inventory 32,400 Buildings and equipment, net of depreciation 214,000 Total assets $ 395,400 Liabilities and Stockholders’ Equity Accounts payable $ 73,000 Common stock 216,000 Retained earnings 106,400 Total liabilities and stockholders’ equity $ 395,400 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: 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 $ 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: Wheeling Company Balance Sheet September 30 Assets Cash $ 70,800 Accounts receivable 130,000 Inventory 59,400 Buildings and equipment, net of depreciation 276,000 Total assets $ 536,200 Liabilities and Stockholders’ Equity Accounts payable $ 172,200 Common stock 216,000 Retained earnings 148,000 Total liabilities and stockholders’ equity $ 536,200 The company is in the process of preparing a budget for October and has assembled the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT