Question

In: Accounting

On June 30, 2018, Rundle Company’s total current assets were $500,500 and its total current liabilities...

On June 30, 2018, Rundle Company’s total current assets were $500,500 and its total current liabilities were $272,500. On July 1, 2018, Rundle issued a short-term note to a bank for $40,400 cash.

Required

Compute Rundle’s working capital before and after issuing the note.

Compute Rundle’s current ratio before and after issuing the note. (Round your answers to 2 decimal places.)

		Before the transaction	After the transaction
a.	Working Capital
b.	Current Ratio

On June 30, 2018, Vernon Company’s total current assets were $501,000 and its total current liabilities were $278,500. On July 1, 2018, Vernon issued a long-term note to a bank for $39,000 cash.

Required

Compute Vernon’s working capital before and after issuing the note.

Compute Vernon’s current ratio before and after issuing the note. (Round your answers to 1 decimal place.)

		Before the transaction	After the transaction
a.	Working Capital
b.	Current Ratio

Expert Solution

Part 1

When Short term notes are issues cash increases which ultimately adds to Current assets. Short term notes is a current liability so current liability also increases

	Total Current assets (A)	Total current liabilities(B)	Working Capital(A-B)	Current Ratio (A/B)
	$ 500,500.00	$ 272,500.00	$ 228,000.00	1.84
Issue of short term notes payable	$ 40,400.00	$ 40,400.00
Current assets after notes issue	$ 540,900.00	$ 312,900.00	$ 228,000.00	1.73

		Before the transaction	After the transaction
a.	Working Capital	$ 228,000.00	$ 228,000.00
b.	Current Ratio	1.84	1.73

Part 2

When Long term notes are issues cash increases which ultimately adds to Current assets but current liabilities does not increase because long term notes is a long term liability.

	Total Current assets (A)	Total current liabilities(B)	Working Capital(A-B)	Current Ratio (A/B)
	$ 501,000.00	$ 278,500.00	$ 222,500.00	1.80
Issue of short term notes payable	$ 39,000.00
Current assets after notes issue	$ 540,000.00	$ 278,500.00	$ 261,500.00	1.94

		Before the transaction	After the transaction
a.	Working Capital	$ 222,500.00	$ 261,500.00
b.	Current Ratio	1.8	1.9

ekkarill92 answered 1 year ago

Calculate total current assets and total current liabilities that would appear in the company’s year-end balance sheet.

The trial balance for K and J Nursery, Inc., listed the following account balances at December 31, 2018, the end of its fiscal year:cash, $16,000accounts receivable, $11,000inventories, $25,000equipment (net), $80,000accounts payable, $14,000wages payable, $9,000interest payable, $1,000note payable (due in 18 months), $30,000common stock, $50,000Calculate total current assets and total current liabilities that would appear in the company’s year-end balance sheet.

($ in millions) Current assets 115 Fixed and other assets 165 Total assets 280 Current liabilities...

($ in millions) Current assets 115 Fixed and other assets 165 Total assets 280 Current liabilities 81 Long-term debt 48 Stockholders' equity 151 Total liabilities and equity 280 Common shares outstanding (millions) 14 Total revenues 436 Total operating costs and expenses 350 Interest expense 15 Income taxes 23 Net profits 48 Dividends paid to common stockholders 13 On the basis of this information, calculate as many liquidity, activity, leverage, profitability, and common stock measures as you can. (Note: Assume the...

At the beginning of the current year, Trenton Company's total assets were 258,000 and its total...

At the beginning of the current year, Trenton Company's total assets were 258,000 and its total liabilities were 180,000 during the year the company reported total revenues of 103,000, total expenses of 81,000 and dividends of 10,000. There were no other changes in equity during the year and total assets at the end of the year were 270,000. Trenton Company's debt ratio at the end of the current year is. A 50.0%. B 1.50%. C 66.7% D 33.3% E 69.8%

At the beginning of the current year, Snell Co. total assets were $282,000 and its total...

At the beginning of the current year, Snell Co. total assets were $282,000 and its total liabilities were $191,200. During the year, the company reported total revenues of $127,000, total expenses of $93,000 and dividends of $22,000. There were no other changes in equity during the year and total assets at the end of the year were $294,000. The company's debt ratio at the end of the current year is: A: 35.0%. B: 65.0%. C: 67.8% D: 147.00% E: 53.8%

A firm has Current Assets of $500,000, Inventory of $200,000, Current Liabilities of $700,000, Total Assets...

A firm has Current Assets of $500,000, Inventory of $200,000, Current Liabilities of $700,000, Total Assets of $3,000,000 and Total Liabilities of $3,500,000. Which of the following statements is correct: a. this firm is bankrupt b. this firm has a Quick Ratio that is greater than one c. this firm has positive equity d. this firm is technically insolvent

1. Quick Ratio= current assets-inventories/ current liabilities 2. Debt to Assets ratio= total debt/total assets 3....

1. Quick Ratio= current assets-inventories/ current liabilities 2. Debt to Assets ratio= total debt/total assets 3. Earnings Per Share (EPS)=total earnings/outstanding shares (must first solve net income-preferred divideneds= total earnings) 4. Net Income (Net profit)=total revenues-total expenses I need help finding the answer to these equations for Target Corporation for 2015 and 2016. please refer to the links for the 10k reports for the company. 2015- https://corporate.target.com/_media/TargetCorp/annualreports/2015/pdfs/Target-2015-Annual-Report.pdf 2016- https://corporate.target.com/_media/TargetCorp/annualreports/2016/pdfs/Target-2016-Annual-Report.pdf?ext=.pdf

Consider the following for Executive Electronics Total Assets: 2017- 12,650,000 and 2018- 12,100,000 Noninterest-bearing current liabilities:...

Consider the following for Executive Electronics Total Assets: 2017- 12,650,000 and 2018- 12,100,000 Noninterest-bearing current liabilities: 2017-550,000 and 2018- 572,000 Net income: 2017- 770,000 and 2018- 880,000 Interest Expense: 2017- $2,310,000 and 2018- 330,000 Tax Rate: 2017- 40% and 2018-40% Required rate of return: 2017- 10% and 2018-12% Evaluate the company in terms of residual income (RI) which is equivalent to EVA since there are nonadjustments for accounting distortions. Residual income 2017: Residual income 2018:

Green Lumber has - Total sales of $387,200, - Total assets of $429,600, - Current liabilities...

Green Lumber has - Total sales of $387,200, - Total assets of $429,600, - Current liabilities of $45,000, - Dividends paid of $24,000, - Net income of $57,700. Assume that all costs, assets, and current liabilities change spontaneously with sales. The tax rate and dividend payout ratios remain constant. Assume the firm is currently operating at full capacity. If the firm's managers project a firm growth rate of 12 percent for next year, what will be the amount of external...

Labels: Current assets Current liabilities December 31, 2018 Expenses For the Year Ended December 31, 2018...

Labels: Current assets Current liabilities December 31, 2018 Expenses For the Year Ended December 31, 2018 Property, plant, and equipment Revenues Amount Descriptions: Book value-building Book value-equipment Change in retained earnings Net income Net loss Retained earnings, December 31, 2018 Retained earnings, January 1, 2018 Total assets Total current assets Total expenses Total liabilities Total liabilities and stockholders’ equity Total property, plant, and equipment Total revenues Total stockholders’ equity CHART OF ACCOUNTS Lamp Light Company General Ledger ASSETS 11 Cash...

At year-end 2018, Wallace Landscaping’s total assets were $2.25million, and its accounts payable were $530,000....

At year-end 2018, Wallace Landscaping’s total assets were $2.25 million, and its accounts payable were $530,000. Sales, which in 2018 were $2.4 million, are expected to increase by 35% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $500,000 in 2018, and retained earnings were $340,000. Wallace has arranged to sell $185,000 of new common stock in 2019...