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Business
Accounting
Assets Current assets Cash Accounts receivable Total current assets Fixed Assets Property, plant & equipement Accumulated depreciation Net fixed assets Total assets Liabilities and Owner's Equity Current liabilities Accounts payable Note payable Deposits from customers Total current liabilities Total liabilities Owner's oqualty Common stock Retained earnings Total owner's exquity Total liabilities and equity Apphing for a Lean 7,000 112,000 (35,000) 77,000 98,0000 2,500 26,500 5,000 34,000 34,000 50,000 98,000 Use balance sheet to the process of applying for a loan. The answers to the questions are as follows: 11. What is the amount of current assets and long-term assets that you have? 12. Calculate the current ratio. Using the rule of thumb given in the text, is this a good or bad ratio? Hint: Current ratio-current assets/current liabilities By the rule of thumb, it should be 2 or greater. The current ratio is an indicator of a business ability to repay debt when it is due 13. Why would the current ratio matter to your banker?

Assets Current assets Cash Accounts receivable Total current assets Fixed Assets Property, plant & equipement Accumulated depreciation Net fixed assets Total assets Liabilities and Owner's Equity Current liabilities Accounts payable Note payable Deposits from customers Total current liabilities Total liabilities Owner's oqualty Common stock Retained earnings Total owner's exquity Total liabilities and equity Apphing for a Lean 7,000 112,000 (35,000) 77,000 98,0000 2,500 26,500 5,000 34,000 34,000 50,000 98,000 Use balance sheet to the process of applying for a loan. The answers to the questions are as follows: 11. What is the amount of current assets and long-term assets that you have? 12. Calculate the current ratio. Using the rule of thumb given in the text, is this a good or bad ratio? Hint: Current ratio-current assets/current liabilities By the rule of thumb, it should be 2 or greater. The current ratio is an indicator of a business ability to repay debt when it is due 13. Why would the current ratio matter to your banker?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assets Current assets Cash Accounts receivable Total current assets Fixed Assets Property, plant & equipment Accumulated depreciation Net fixed assets Total assets Liabilities and Owner's Equity Current liabilities Accounts payable Note payable Deposits from customers Total current liabilities Total liabilities Owner's equity Common stock Retained earnings Total owner's equity Total liabilities and equity Applying for a Loan. 14,000 7,000 21,000 112,000 (35,000) 77,000 98,000 2,500 26,500 5,000 34,000 34,000 50,000 14,000 64,000 98,000 Use balance sheet to the process of applying for a loan. The answers to the questions are as follows: 11. What is the amount of current assets and long-term assets that you have? 12. Calculate the current ratio. Using the rule of thumb given in the text, is this a good or bad ratio? Hint: Current ratio- current assets/current liabilities By the rule of thumb, it should be 2 or greater. The current ratio is an indicator of a business ability to repay debt when it is due 13. Why would the current ratio matter to your banker?
Transcribed Image Text:Assets Current assets Cash Accounts receivable Total current assets Fixed Assets Property, plant & equipment Accumulated depreciation Net fixed assets Total assets Liabilities and Owner's Equity Current liabilities Accounts payable Note payable Deposits from customers Total current liabilities Total liabilities Owner's equity Common stock Retained earnings Total owner's equity Total liabilities and equity Applying for a Loan. 14,000 7,000 21,000 112,000 (35,000) 77,000 98,000 2,500 26,500 5,000 34,000 34,000 50,000 14,000 64,000 98,000 Use balance sheet to the process of applying for a loan. The answers to the questions are as follows: 11. What is the amount of current assets and long-term assets that you have? 12. Calculate the current ratio. Using the rule of thumb given in the text, is this a good or bad ratio? Hint: Current ratio- current assets/current liabilities By the rule of thumb, it should be 2 or greater. The current ratio is an indicator of a business ability to repay debt when it is due 13. Why would the current ratio matter to your banker?
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