Question

Question 1 Part A and B

A. Listed below are year-end account balances ($ in millions) taken from the records of Symphony Stores.

	Debit		Credit
Accounts receivable-trade	696
Building and equipment	931
Cash-checking	45
Interest receivable	46
Inventory	34
Land	169
Notes receivable (long-term)	456
Petty cash fund	5
Prepaid rent	34
Supplies	9
Trademark	57
Accounts payable-trade			649
Accumulated depreciation			75
Additional paid-in capital			484
Allowance for uncollectible accounts			19
Cash dividends payable			22
Common stock, at par			13
Income tax payable			60
Notes payable (long-term)			832
Retained earnings			303
Deferred revenues			25
TOTALS	2,482		2,482

What would Symphony report as total assets?

Multiple Choice

• $1,556 millions.

• $2,407 millions.

• $2,482 millions.

• $2,388 millions.

B. Listed below are year-end account balances ($ in millions) taken from the records of Symphony Stores.

	Debit		Credit
Accounts receivable-trade	711
Building and equipment	939
Cash-checking	40
Interest receivable	48
Inventory	31
Land	165
Notes receivable (long-term)	461
Petty cash funds	7
Prepaid rent	24
Supplies	13
Trademark	40
Accounts payable-trade			623
Accumulated depreciation			76
Additional paid-in capital			468
Allowance for uncollectible accounts			16
Cash dividends payable			27
Common stock, at par			13
Income tax payable			64
Notes payable (long-term)			874
Retained earnings			285
Deferred revenues			33
TOTALS	2,479		2,479

What is the amount of working capital for Symphony?

Multiple Choice

• $98 millions.

• $111 millions.

• $126 millions.

• $63 millions.

Answer 1

Ans 1 : $2,407 millions.

Ans 2: $111 millions.

Explained as follows:

Total Assets
Particulars	$ in millions
Accounts receivable-trade	696
Building and equipment (931-75)	856
Depreciaton deducted
Cash-checking	45
Interest receivable	46
Inventory	34
Land	169
Notes receivable (long-term)	456
Petty cash fund	5
Prepaid rent	34
Supplies	9
Trademark	57
Total Assets	2407
Working capital = Current assets - Current liabilities
Current Assets	$ in millions	$ in millions
Accounts receivable-trade	711
Cash-checking	40
Interest receivable	48
Inventory	31
Petty cash funds	7
Prepaid rent	24
Supplies	13
Total Current Assets (a)		874
Current Liabilites
Accounts payable-trade	623
Allowance for uncollectible accounts	16
Cash dividends payable	27
Income tax payable	64
Deferred revenues	33
Total Current Liabilites (b)		763
Working Capital (a-b)		111