Buxton Ltd. Adjusted Trial Balance December 31, 20XX Debit Account Title Cash Accounts receivable Supplies Prepaid rent Equipment Accumulated depreciation Accounts payable Interest payable Unearned service revenue Income tax payable Note payable Common shares Retained earnings Dividends Service revenue Depreciation expense Salary expense Rent expense Interest expense Insurance expense Supplies expense Income tax expense Total $ 1,420 9,000 2,270 1,580 37,500 24,200 1,620 39,700 10,900 3,040 3,750 2,870 7,250 145,100 $ Credit 4,260 3,690 780 590 2,080 18,100 5,200 1,050 109,350 145,100
Buxton Ltd. Adjusted Trial Balance December 31, 20XX Debit Account Title Cash Accounts receivable Supplies Prepaid rent Equipment Accumulated depreciation Accounts payable Interest payable Unearned service revenue Income tax payable Note payable Common shares Retained earnings Dividends Service revenue Depreciation expense Salary expense Rent expense Interest expense Insurance expense Supplies expense Income tax expense Total $ 1,420 9,000 2,270 1,580 37,500 24,200 1,620 39,700 10,900 3,040 3,750 2,870 7,250 145,100 $ Credit 4,260 3,690 780 590 2,080 18,100 5,200 1,050 109,350 145,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Buxton Ltd.
Adjusted Trial Balance
December 31, 20XX
Account Title
Cash
Accounts receivable
Supplies
Prepaid rent
Equipment
Accumulated depreciation
Accounts payable
Interest payable
Unearned service revenue
Income tax payable
Note payable
Common shares
Retained earnings
Dividends
Service revenue
Depreciation expense
Salary expense
Rent expense
Interest expense
Insurance expense
Supplies expense
Income tax expense
Total
$
$
Debit
1,420
9,000
2,270
1,580
37,500
24,200
1,620
39,700
10,900
$
3,040
3,750
2,870
7,250
145,100 $
Credit
4,260
3,690
780
590
2,080
18,100
5,200
1,050
109,350
145,100
Transcribed Image Text:Requirement 1. Prepare Buxton Ltd.'s 20XX income statement, statement of retained earnings, and balance sheet. List expenses (except for income tax) in decreasing order on the income statement, and show total liabilities on the balance sheet.
Begin by preparing Buxton Ltd.'s 20XX income statement. In this step, select the labels for the heading. Then, complete the body of the income statement in the next step.
Buxton Ltd.
Income Statement
For the Year Ended December 31, 20XX
Revenue:
Expenses:
Total expenses
Income before tax
Add:
Subtotal
Less:
Total assets
Net income
Next, prepare the statement of retained earnings. Select the labels for the heading in this step. Then complete the body of the statement in the next step. (Complete all input fields.)
Assets
Total liabilities
Buxton's lenders require that the company maintain a debt ratio
Prepare the balance sheet. In this step, select the labels for the heading. Then, complete the rest of the balance sheet in the next step. (If an input field is not used in the statement, leave the input field empty; do not select a label or enter a zero.)
Liabilities
Shareholders' Equity
Total shareholders' equity
Total liabilities and shareholders' equity
Required
1. Prepare Buxton Ltd.'s 20XX income statement, statement of
retained earnings, and balance sheet. List expenses (except for
income tax) in decreasing order on the income statement, and show total
liabilities on the balance sheet.
=
2. Buxton Ltd.'s lenders require that the company maintain a debt ratio no
higher than 0.50. Compute Buxton Ltd.'s debt ratio as of December 31,
20XX, to determine whether the company is in compliance with this debt
restriction. If not, suggest a way that Buxton Ltd. could have avoided this
difficult situation.
0.50. Buxton is in
Print
Requirement 2. Buxton Ltd.'s lenders require that the company maintain a debt ratio no higher than 0.50. Compute Buxton Ltd.'s debt ratio as of December 31, 20XX, to determine whether the company is in compliance with this debt restriction. If not, suggest a way that
Buxton Ltd. could have avoided this difficult situation.
Compute Buxton Ltd.'s debt ratio as of December 31, 20XX. Select the labels to calculate the debt ratio, and then enter the amounts. (Round your answer to two decimal places.)
Debt ratio
Done
this debt restriction as of December 31, 20XX. Since Buxton
in violation, it
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