Question
In: Accounting
The following is a December 31, 2018, post-closing trial balance for Culver City Lighting, Inc. Account...
The following is a December 31, 2018, post-closing trial balance for Culver City Lighting, Inc. Account Title Debits Credits Cash $ 68,000 Accounts receivable 52,000 Inventories 58,000 Prepaid insurance 28,000 Equipment 120,000 Accumulated depreciation—equipment $ 47,000 Patent, net 53,000 Accounts payable 18,500 Interest payable 8,500 Note payable (due in 10, equal annual installments) 140,000 Common stock 83,000 Retained earnings 82,000 Totals $ 379,000 $ 379,000 a. Calculate the current ratio. b. Calculate the acid-test ratio. c. Calculate the debt to equity ratio.
Solutions
Expert Solution
a. Calculations for Current Ratio:-
Current Ratio calculated by Current Assets divided by Current Liabilities.
Current Ratio=(Current Assets/Current Liabilities)
Current Assets=Cash+Accounts Receivable+Inventories+Prepaid Insurance
=$(68,000+52,000+58,000+28,000)
=$206,000
Current Liabilities=Accounts Payable+Interest Payable
=$(18,500+8,500)
=$27,000
Current Ratio=(Current Assets/Current Liabilities)
=(206,000/27,000)
=7.63:1
b. Calculations for Acid - test Ratio:-
Acid - Test Ratio calculated by Quick Assets divided by Current Liabilities.
Acid - Test Ratio=(Quick Assets/Current Liabilities)
Quick Assets= Cash+Accounts Receivable
=$(68,000+52,000)
=$120,000
Acid - Test Ratio=(Quick Assets/Current Liabilities)
=$(120,000/27,000)
=4.44:1
c. Calculations for Debt to Equity Ratio:-
Debt to Equity Ratio calculated by Total Liabilities divided by Stockholders Equity.
Debt to Equity Ratio=(Total Liabilities/Stockholders Equity)
Total Liabilities=Accounts Payable+Interest Payable+Notes Payable
=$(18,500+8,500+140,000)
=$167,000
Stockholders Equity=Common Stock+Retained Earnings
=$(83,000+82,000)
=$165,000
Debt to Equity Ratio=Total Liabilities/ Stockholders Equity
=$(167,000/165,000)
=1.012:1
ekkarill92 answered 11 months agoRelated Solutions
The following is a December 31, 2018, post-closing trial balance for Culver City Lighting, Inc. Account...
The following is a December 31, 2018, post-closing trial balance
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55,000 Accounts receivable 39,000 Inventories 45,000 Prepaid
insurance 15,000 Equipment 100,000 Accumulated
depreciation—equipment 34,000 Patent, net 40,000 Accounts payable
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installments) 100,000 Common stock 70,000 Retained earnings 76,000
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Prepare a classified balance sheet for Culver City Lighting,
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The following is a December 31, 2021, post-closing trial balance for Culver City Lighting, Inc. Account...
The following is a December 31, 2021, post-closing trial balance
for Culver City Lighting, Inc.
Account Title
Debits
Credits
Cash
$
65,000
Accounts receivable
49,000
Inventory
55,000
Prepaid insurance
25,000
Equipment
130,000
Accumulated depreciation
$
44,000
Patent (net)
50,000
Accounts payable
17,000
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Notes payable (due in 10 years)
160,000
Common stock
80,000
Retained earnings
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$
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a. Calculate the current ratio.
b. Calculate the acid-test ratio.
c. Calculate the debt to equity ratio....
The following is a December 31, 2021, post-closing trial balance for Culver City Lighting, Inc. Account...
The following is a December 31, 2021, post-closing trial balance
for Culver City Lighting, Inc.
Account Title
Debits
Credits
Cash
$
75,000
Accounts receivable
59,000
Inventory
65,000
Prepaid insurance
35,000
Equipment
160,000
Accumulated depreciation
$
54,000
Patent (net)
60,000
Accounts payable
22,000
Interest payable
12,000
Notes payable (due in 10 years)
210,000
Common stock
90,000
Retained earnings
66,000
Totals
$
454,000
$
454,000
Prepare a classified balance sheet for Culver City Lighting, Inc.
(Amounts to be deducted should be indicated...
The following is a December 31, 2018, post-closing trial balance for Georgetown, Inc. . Account Title...
The following is a December 31, 2018, post-closing trial balance
for Georgetown, Inc. .
Account Title
Debits
Credits
Cash
$
45,000
Investments
110,000
Accounts receivable
60,000
Inventories
200,000
Prepaid insurance (for the next 9 months)
9,000
Land
90,000
Buildings
420,000
Accumulated depreciation—buildings
$
100,000
Equipment
110,000
Accumulated depreciation—equipment
60,000
Patents (net of amortization)
10,000
Accounts payable
75,000
Notes payable
130,000
Interest payable
20,000
Bonds Payable
240,000
Common stock
300,000
Retained earnings
129,000
Totals
$
1,054,000
$
1,054,000
Additional information:
The...
The following is a December 31, 2018, post-closing trial balance for the Jackson Corporation. Account Title...
The following is a December 31, 2018, post-closing trial balance
for the Jackson Corporation.
Account Title
Debits
Credits
Cash
$
52,000
Accounts receivable
46,000
Inventories
87,000
Prepaid rent for the next 8
months
28,000
Marketable securities (short
term)
22,000
Machinery
205,000
Accumulated
depreciation—machinery
$
23,000
Patent (net of
amortization)
91,000
Accounts payable
14,000
Wages payable
10,000
Taxes payable
44,000
Bonds payable (due in 10
years)
260,000
Common stock
150,000
Retained earnings
30,000
Totals
$
531,000
$
531,000
Required:
Prepare a...
The following is a December 31, 2018, post-closing trial balance for the Jackson Corporation. Account Title...
The following is a December 31, 2018, post-closing trial balance
for the Jackson Corporation.
Account Title
Debits
Credits
Cash
$
52,000
Accounts receivable
46,000
Inventories
87,000
Prepaid rent for the next 8
months
28,000
Marketable securities (short
term)
22,000
Machinery
205,000
Accumulated
depreciation—machinery
$
23,000
Patent (net of
amortization)
91,000
Accounts payable
14,000
Wages payable
10,000
Taxes payable
44,000
Bonds payable (due in 10
years)
260,000
Common stock
150,000
Retained earnings
30,000
Totals
$
531,000
$
531,000
Required:
Prepare a...
The following is a December 31, 2018, post-closing trial balance for Almway Corporation. Account Title Debits...
The following is a December 31, 2018, post-closing trial balance
for Almway Corporation.
Account Title
Debits
Credits
Cash
$
45,000
Investments
110,000
Accounts receivable
60,000
Inventories
200,000
Prepaid insurance (for the next
9 months)
9,000
Land
90,000
Buildings
420,000
Accumulated
depreciation—buildings
$
100,000
Equipment
110,000
Accumulated
depreciation—equipment
60,000
Patents (net of
amortization)
10,000
Accounts payable
75,000
Notes payable
130,000
Interest payable
20,000
Bonds Payable
240,000
Common stock
300,000
Retained earnings
129,000
Totals
$
1,054,000
$
1,054,000
Additional information:
The investment...
The following is a December 31, 2018, post-closing trial balance for Almway Corporation. Account Title Debits...
The following is a December 31, 2018, post-closing trial balance
for Almway Corporation.
Account Title
Debits
Credits
Cash
$
73,000
Investments
138,000
Accounts receivable
74,000
Inventories
214,000
Prepaid insurance (for the next 9 months)
5,000
Land
118,000
Buildings
434,000
Accumulated depreciation—buildings
$
114,000
Equipment
124,000
Accumulated depreciation—equipment
74,000
Patents (net of amortization)
24,000
Accounts payable
103,000
Notes payable
172,000
Interest payable
34,000
Bonds Payable
254,000
Common stock
342,000
Retained earnings
111,000
Totals
$
1,204,000
$
1,204,000
Additional information:
The investment...
The following is a December 31, 2018, post-closing trial balance for Almway Corporation. Account Title Debits...
The following is a December 31, 2018, post-closing trial balance
for Almway Corporation. Account Title Debits Credits Cash $ 85,000
Investments 150,000 Accounts receivable 80,000 Inventories 220,000
Prepaid insurance (for the next 9 months) 8,000 Land 130,000
Buildings 440,000 Accumulated depreciation—buildings $ 120,000
Equipment 130,000 Accumulated depreciation—equipment 80,000 Patents
(net of amortization) 30,000 Accounts payable 115,000 Notes payable
190,000 Interest payable 40,000 Bonds Payable 260,000 Common stock
360,000 Retained earnings 108,000 Totals $ 1,273,000 $ 1,273,000
Additional information: The investment...
The following is a December 31, 2018, post-closing trial balance for the Jackson Corporation.
The following is a December 31, 2018, post-closing trial balance for the Jackson Corporation.Account TitleDebitsCreditsCash$40,000 Accounts receivable34,000 Inventories75,000 Prepaid rent for next 8 months16,000 Marketable securities (short term)10,000 Machinery1,45,000 Accumulated depreciation - machinery 11,000Patent (net of amortization)83,000 accounts payable 8,000wages payable 4,000Taxes payable 32,000Bonds payable (due in 10 Years) 2,00,000Commons stock 1,00,000Retained Earnings 48,000Totals403,000403,000Prepare a classified balance sheet for Jackson Corporation at December 31,2018
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