Given below are selected balance sheet items and ratios as of June 30, 2019 for the More Debits than Credits School of Accounting which issues erasers instead of diplomas to its graduates. Total stockholders' equity (includes 100,00 shares of no par common stock issued at $6 per share) $1,000,000 Plant and equipment (net) 470,000 Asset Turnover rate per year (sales/total assets) 3 times

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Given below are selected balance sheet items and ratios as of June 30, 2019 for the More Debits than
Credits School of Accounting which issues erasers instead of diplomas to its graduates.
Total stockholders' equity (includes 100,00 shares of
no par common stock issued at $6 per share)
$1,000,000
Plant and equipment (net)
470,000
Asset Turnover rate per year (sales/total assets)
3 times
Inventory turnover rate per year
6 times
Gross profit percentage
30%
Ratio of current liabilities to stockholders' equity
(there is no long term debt)
1.2 to 1
Acid-Test ratio (quick ratio)
0.8 to 1
Assume that balance sheet figures represent average amounts and that all sales are made on account.
Instructions: From the foregoing information, construct a balance sheet for the corporation as of June
30, 2019 in as much detail as the data permits.
Transcribed Image Text:Given below are selected balance sheet items and ratios as of June 30, 2019 for the More Debits than Credits School of Accounting which issues erasers instead of diplomas to its graduates. Total stockholders' equity (includes 100,00 shares of no par common stock issued at $6 per share) $1,000,000 Plant and equipment (net) 470,000 Asset Turnover rate per year (sales/total assets) 3 times Inventory turnover rate per year 6 times Gross profit percentage 30% Ratio of current liabilities to stockholders' equity (there is no long term debt) 1.2 to 1 Acid-Test ratio (quick ratio) 0.8 to 1 Assume that balance sheet figures represent average amounts and that all sales are made on account. Instructions: From the foregoing information, construct a balance sheet for the corporation as of June 30, 2019 in as much detail as the data permits.
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