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PE 4-68 Working capital and current ratio Current assets and current liabilities for Brimstone Company follow: Current assets Current liabilities 1. Accounts Payable 2. Accounts Receivable 2019 $1,586,250 705,000 a. Determine the working capital and current ratio for 2019 and 2018. b. Does the change in the current ratio from 2018 to 2019 indicate a favorable or an unfavorable change? 3. Cash 4. Eddy Rosewood, Drawing 5. Fees Earned 2018 $1,210,000 550,000 EX 4-1 Flow of accounts into financial statements OBJ. 1,2 The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of owner's equity, or balance sheet. 6. Supplies 7. Unearned Rent 8. Utilities Expense 9. Wages Expense 10. Wages Payable 2. Equipment 3. Fees Earned 4. Insurance Expense 5. Land 6. Prepaid Rent OBJ. 7 EX 4-2 Classifying accounts OBJ. 1, 2 Balances for each of the following accounts appear in an adjusted trial balance. Identify each as (a) asset, (b) liability, (c) revenue, or (d) expense. 1. Accounts Receivable 7. Rent Revenue 8. Salary Expense 9. Salary Payable 10. Supplies 11. Unearned Rent 12. Wages Payable

PE 4-68 Working capital and current ratio Current assets and current liabilities for Brimstone Company follow: Current assets Current liabilities 1. Accounts Payable 2. Accounts Receivable 2019 $1,586,250 705,000 a. Determine the working capital and current ratio for 2019 and 2018. b. Does the change in the current ratio from 2018 to 2019 indicate a favorable or an unfavorable change? 3. Cash 4. Eddy Rosewood, Drawing 5. Fees Earned 2018 $1,210,000 550,000 EX 4-1 Flow of accounts into financial statements OBJ. 1,2 The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of owner's equity, or balance sheet. 6. Supplies 7. Unearned Rent 8. Utilities Expense 9. Wages Expense 10. Wages Payable 2. Equipment 3. Fees Earned 4. Insurance Expense 5. Land 6. Prepaid Rent OBJ. 7 EX 4-2 Classifying accounts OBJ. 1, 2 Balances for each of the following accounts appear in an adjusted trial balance. Identify each as (a) asset, (b) liability, (c) revenue, or (d) expense. 1. Accounts Receivable 7. Rent Revenue 8. Salary Expense 9. Salary Payable 10. Supplies 11. Unearned Rent 12. Wages Payable

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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PE 4-68 Working capital and current ratio Current assets and current liabilities for Brimstone Company follow: Current assets Current liabilities 2019 $1,586,250 705,000 2018 $1,210,000 550,000 a. Determine the working capital and current ratio for 2019 and 2018. b. 1. Accounts Payable 2. Accounts Receivable 3. Cash 4. Eddy Rosewood, Drawing 5. Fees Earned Does the change in the current ratio from 2018 to 2019 indicate a favorable or an unfavorable change? EX 4-1 Flow of accounts into financial statements OBJ. 1,2 The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of owner's equity, or balance sheet. 6. Supplies 7. Unearned Rent OBJ. 7 8. Utilities Expense 9. Wages Expense 10. Wages Payable EX 4-2 Classifying accounts OBJ. 1, 2 Balances for each of the following accounts appear in an adjusted trial balance. Identify each as (a) asset, (b) liability, (c) revenue, or (d) expense. 1. Accounts Receivable 7. Rent Revenue 2. Equipment 3. Fees Earned 4. Insurance Expense 5. Land 6. Prepaid Rent 8. Salary Expense 9. Salary Payable 10. Supplies 11. Unearned Rent 12. Wages Payable
Transcribed Image Text:PE 4-68 Working capital and current ratio Current assets and current liabilities for Brimstone Company follow: Current assets Current liabilities 2019 $1,586,250 705,000 2018 $1,210,000 550,000 a. Determine the working capital and current ratio for 2019 and 2018. b. 1. Accounts Payable 2. Accounts Receivable 3. Cash 4. Eddy Rosewood, Drawing 5. Fees Earned Does the change in the current ratio from 2018 to 2019 indicate a favorable or an unfavorable change? EX 4-1 Flow of accounts into financial statements OBJ. 1,2 The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of owner's equity, or balance sheet. 6. Supplies 7. Unearned Rent OBJ. 7 8. Utilities Expense 9. Wages Expense 10. Wages Payable EX 4-2 Classifying accounts OBJ. 1, 2 Balances for each of the following accounts appear in an adjusted trial balance. Identify each as (a) asset, (b) liability, (c) revenue, or (d) expense. 1. Accounts Receivable 7. Rent Revenue 2. Equipment 3. Fees Earned 4. Insurance Expense 5. Land 6. Prepaid Rent 8. Salary Expense 9. Salary Payable 10. Supplies 11. Unearned Rent 12. Wages Payable
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