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(a)
The current ratio and explain if the company is financially healthy.
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Answer to Problem 19P
The current ratio is
Since the current ratio is greater than
Explanation of Solution
Calculation:
Make the
Item | Amount | Location on Balance Sheet |
Cash | Current Asset | |
Net Accounts and Receivables | Current Asset | |
Retailers Inventories | Current Asset | |
Current Asset | ||
Account Payable(Short Term) | Current Liabilities | |
Notes Payable | Current Liabilities | |
Accrued Expenses | Current Liabilities |
Calculate the current ratio.
Using the table, the total current asset is
Substitute
Conclusion:
Thus, the current ratio is
Since the current ratio is greater than
(b)
The balance sheet and construct them.
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Answer to Problem 19P
The balance sheet is shown below.
J&W Graphic Supply | Balance Sheet |
Assets | |
Current Assets | |
Cash | |
Accounts Receivable | |
Inventories | |
Less Bad Debt Provision | |
Total Current Asset | |
Fixed Asset | |
Property and Equipment | |
Less Accumulated Depreciation | |
Total Fixed Asset | |
Liabilities And Owner’s Equity | |
Current Liability | |
Account Payable | |
Notes Payable | |
Accured Expenses | |
Total Current Liabilities | |
Owner’s Equity | |
Stock | |
Capital Surplus | |
Retained Earning | |
Total owner’s Equity | |
Total owners and liabilities’ Equity |
Explanation of Solution
Calculation:
Make the balance sheet.
All amount are shown in
J&W Graphic Supply | Balance Sheet |
Assets | |
Current Assets | |
Cash | |
Accounts Receivable | |
Inventories | |
Less Bad Debt Provision | |
Total Current Asset | |
Fixed Asset | |
Property and Equipment | |
Less Accumulated Depreciation | |
Total Fixed Asset | |
Liabilities And Owner’s Equity | |
Current Liability | |
Account Payable | |
Notes Payable | |
Accured Expenses | |
Total Current Liabilities | |
Owner’s Equity | |
Stock | |
Capital Surplus | |
Retained Earning | |
Total owner’s Equity | |
Total owners and liabilities’ Equity |
Conclusion:
The balance sheet is shown below.
J&W Graphic Supply | Balance Sheet |
Assets | |
Current Assets | |
Cash | |
Accounts Receivable | |
Inventories | |
Less Bad Debt Provision | |
Total Current Asset | |
Fixed Asset | |
Property and Equipment | |
Less Accumulated Depreciation | |
Total Fixed Asset | |
Liabilities And Owner’s Equity | |
Current Liability | |
Account Payable | |
Notes Payable | |
Accured Expenses | |
Total Current Liabilities | |
Owner’s Equity | |
Stock | |
Capital Surplus | |
Retained Earning | |
Total owner’s Equity | |
Total owners and liabilities’ Equity |
(c)
The total assets, total liabilities and total earning.
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Answer to Problem 19P
The total asset is
The total liabilities is
The total earning is
Explanation of Solution
Calculation:
Make the balance sheet.
All amount are shown in
J&W Graphic Supply | Balance Sheet |
Assets | |
Current Assets | |
Cash | |
Accounts Receivable | |
Inventories | |
Less Bad Debt Provision | |
Total Current Asset | |
Fixed Asset | |
Property and Equipment | |
Less Accumulated Depreciation | |
Total Fixed Asset | |
Liabilities And Owner’s Equity | |
Current Liability | |
Account Payable | |
Notes Payable | |
Accured Expenses | |
Total Current Liabilities | |
Owner’s Equity | |
Stock | |
Capital Surplus | |
Retained Earning | |
Total owner’s Equity | |
Total owners and liabilities’ Equity |
From the table,
The total asset is
The total liabilities is
The total earning is
Conclusion:
Thus, the total asset is
The total liabilities is
The total earning is
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Chapter 17 Solutions
ENGR.ECONOMIC ANALYSIS
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