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
Cornerstones of Financial Accounting
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Author:Jay Rich, Jeff Jones
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Chapter9: Long-term Liabilities
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Problem 89E: Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and...
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff7a0b1ac-5d82-4387-b6a0-dcafec33dc3e%2F17030b15-bd03-4ea7-aa6d-20380ed5f4ce%2Follrc7m_processed.jpeg&w=3840&q=75)
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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