Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: $ 48,000 87,000 129,e00 135, 000 21,000 Cash Marketable securities Accounts receivable, net Inventory Prepaid expensés Total current assets $428,800 Accounts payable $147,000 33, 000 Other accrued liabilities Short-term debt 60,000 Total current liabilities $240,000 Required: a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30. 2019 b. Summarized here are the transactionsievents that took place during the fiscal year ended September 30, 2020 Prepare Journal entries for the below transactions and Indicate the effect of each item on Tibbetts Company's working capital, current ratio, and acid-test ratio. Use + for Increase, - for decrease, and (NE) for no effect. 1. Credit sales for the year amounted to $360,000. The cost of goods sold was $234,000. 2 Collected accounts receivable, $378,000. 3. Purchased Inventory on account, $252,000 4. Issued 250 shares of common stock for $54 per share. 5. Wrote off $10,500 of uncollectible accounts using the allowance for bad debts 6. Declared and pald a cash dividend, $30,000. 7. Sold marketable securities costing $39,000 for $46,500 in cash. 8. Recorded Insurance expense for the year, $18,000. The premium for the policy was paid In June 2019 9. Borrowed cash on a short-term bank loan, $15,000. 10. Repaid principal of $60,000 and interest of $4,500 on a long-term bank loàn. Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019. (Round "Ratio" answers to 2 decimal places.) Working capital Current ratio Acid-test ratio
Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: $ 48,000 87,000 129,e00 135, 000 21,000 Cash Marketable securities Accounts receivable, net Inventory Prepaid expensés Total current assets $428,800 Accounts payable $147,000 33, 000 Other accrued liabilities Short-term debt 60,000 Total current liabilities $240,000 Required: a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30. 2019 b. Summarized here are the transactionsievents that took place during the fiscal year ended September 30, 2020 Prepare Journal entries for the below transactions and Indicate the effect of each item on Tibbetts Company's working capital, current ratio, and acid-test ratio. Use + for Increase, - for decrease, and (NE) for no effect. 1. Credit sales for the year amounted to $360,000. The cost of goods sold was $234,000. 2 Collected accounts receivable, $378,000. 3. Purchased Inventory on account, $252,000 4. Issued 250 shares of common stock for $54 per share. 5. Wrote off $10,500 of uncollectible accounts using the allowance for bad debts 6. Declared and pald a cash dividend, $30,000. 7. Sold marketable securities costing $39,000 for $46,500 in cash. 8. Recorded Insurance expense for the year, $18,000. The premium for the policy was paid In June 2019 9. Borrowed cash on a short-term bank loan, $15,000. 10. Repaid principal of $60,000 and interest of $4,500 on a long-term bank loàn. Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019. (Round "Ratio" answers to 2 decimal places.) Working capital Current ratio Acid-test ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Selected balance sheet accounts for Tibbetts Company on September 30, 2019. are as follows:
Cash
Marketable securities
Accounts receivable, net
Inventory
Prepaid expenses
$ 48,000
87,000
129,000
135, 000
21,000
Total current assetS
$420,000
Accounts payable
Other accrued liabilities
$147,000
33,000
60,000
Short-term debt
Total current liabilities
$240,000
Required:
a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30. 2019
b. Summarized here are the transactions/events that took place during the fiscal year ended September 30, 2020. Prepare Journal
entries for the below transactions and Indicate the effect of each item on Tibbetts Company's working capital, current ratio, and
acid-test ratio. Use + for Increase, - for decrease, and (NE) for no effect.
1. Credit sales for the year amounted to $360,000. The cost of goods sold was $234.000
2 Collected accounts recelvable, $378,000.
3. Purchased inventory on account, $252,000.
4. Issued 250 shares of common stock for $54 per share.
5. Wrote off $10,500 of uncollectible accounts using the allowance for bad debts
6. Declared and pald a cash dividend, $30,000
7. Sold marketable securitles costing $39,000 for $46,500 in cash.
8. Recorded insurance expense for the year, $18,00O. The premium for the policy was paid In June 2019
9. Borrowed cash on a short-term bank loan, $15,000.
10. Repaid principal of $60,000 and interest of $4,500 on a long-term bank loan.
Complete this question by entering your answers in the tabs below.
Required A
Required B1
Required B2
Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019. (Round
"Ratio" answers to 2 decimal places.)
Working capital
Current ratio
Acid-test ratio
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