Question

Superior Hardwood Company distributes hardwood products to small furniture manufacturers. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 2019. ACCOUNTS Debit Credit Cash $ 22,800 Petty Cash Fund 500 Notes Receivable, due 2020 10,500 Accounts Receivable 84,000 Allowance for Doubtful Accounts $ 4,700 Merchandise Inventory 221,000 Warehouse Supplies 2,730 Office Supplies 1,290 Prepaid Insurance 6,300 Land 33,000 Building 165,000 Accumulated Depreciation—Building 46,200 Warehouse Equipment 30,500 Accumulated Depreciation—Warehouse Equipment 13,500 Delivery Equipment 44,500 Accumulated Depreciation—Delivery Equipment 17,000 Office Equipment 18,500 Accumulated Depreciation—Office Equipment 8,100 Notes Payable, due 2020 18,900 Accounts Payable 37,700 Interest Payable 450 Mortgage Payable 54,500 Loans Payable, Long-term 10,500 Charles Ronie, Capital (Jan. 1) 348,260 Charles Ronie, Drawing 125,700 Income Summary 231,000 221,000 Sales 1,691,000 Sales Returns and Allowances 16,900 Interest Income 1,450 Purchases 754,000 Freight In 12,500 Purchases Returns and Allowances 7,140 Purchases Discounts 9,860 Warehouse Wages Expense 186,600 Warehouse Supplies Expense 5,800 Depreciation Expense—Warehouse Equipment 4,500 Salaries Expense—Sales 256,200 Travel and Entertainment Expense 20,200 Delivery Wages Expense 59,030 Depreciation Expense—Delivery Equipment 8,500 Salaries Expense—Office 69,300 Office Supplies Expense 2,700 Insurance Expense 4,900 Utilities Expense 7,990 Telephone Expense 5,220 Payroll Taxes Expense 52,500 Property Taxes Expense 4,300 Uncollectible Accounts Expense 4,500 Depreciation Expense—Building 7,700 Depreciation Expense—Office Equipment 2,700 Interest Expense 6,900 Totals $ 2,490,260 $ 2,490,260 Required: Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses. Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period. Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than a year. Analyze: What is the current ratio for this business?

Answer 1