Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 7, Problem 28AE
Quick ratio and
Consider the following data
COMPANY | A | B | C | D |
Cash........................................... | $ 8,700 | $ 6,600 | $ 1,800 | $10,300 |
Short-term Investments............. | 6,700 | 3,100 | 1,200 | 4,900 |
Net Receivables.......................... | 13,400 | 11,000 | 5,400 | 13,500 |
Total current assets................... | 31,800 | 26,900 | 9,300 | 32,400 |
Current Liabilities....................... | 20,100 | 10,200 | 4,500 | 37,000 |
Requirements
- 1. Calculate the quick assets and the quick ratio for each company (round your final answers to two decimal places).
- 2. Calculate the current ratio for each company (round your final answers to two decimal places).
- 3. Which company should be concerned about its liquidity?
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Record each of these transactions
1 Cashβ¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦. 300,000
Β Β Β Β Β Β Β Β Β Β Β Capital Stockβ¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦Β Β Β Β Β Β Β Β Β Β Β Β 300,000
Β Β Β Issued capital stock at $60 per shareΒ
4 Diagnostic Equipmentβ¦β¦β¦β¦β¦β¦β¦β¦250,000
Β Β Β Β Β Β Β Β Β Β Β Cashβ¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 100,000
Β Β Β Β Β Β Β Β Β Β Β Notes Payableβ¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 150,000
Β Purchased equipment, paying part in cash and signing a note payable for the balance
12 Account Payableβ¦β¦β¦β¦β¦.......6,000
Β Β Β Β Β Β Β Β Β Β Β Cashβ¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦β¦.Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β $6,000
Paid account payable to Zeller Laboratories
19 surgical suppliesβ¦β¦β¦β¦β¦β¦β¦β¦4,000
Β Β Β Β Β Β Β Β Β Β Β Accounts Payableβ¦β¦β¦β¦β¦β¦β¦β¦β¦Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β $Β Β Β Β 4,000
25 Cashβ¦β¦β¦β¦β¦β¦β¦..80,000
Β Β Β Β Β Β Β Β Β Β Β Accounts Retrievableβ¦β¦β¦β¦β¦β¦β¦β¦..Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 80,000
30 Dividendsβ¦β¦β¦β¦β¦$50,000
Β Β Β Β Β Β Β Β Β Β Β Cashβ¦β¦β¦β¦β¦..Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 500,000Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β
Β
ADDITIONAL REQUIREMENT FOR 3.2
Posting of transaction from General Journal to T-Accounts
Prepare trialβ¦
Dinner (per person) . . . . . . . . . . . . . . . . . . . . . $7Favors and program (per person) . . . . . . . . . . . $3Band . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,500Tickets and advertising . . . . . . . . . . . . . . . . . . . $700Riverboat rental . . . . . . . . . . . . . . . . . . . . . . . . $4,800Floorshow and strolling entertainers . . . . . . . . . . $1,000The committee members would like to charge $30 per person for the eveningβs activities.Required:1. Compute the break-even point for the Extravaganza (in terms of the number of persons that must attend).2. Assume that only 250 persons attended the Extravaganza last year. If the same number attend this year, what price per ticket must be charged to break even?3. Refer to the original data ($30 ticket price per person). Prepare a CVP graph for the Extravaganza from zero tickets up to 600 tickets sold.
Trouble Company has provided the following data:
Sales........................................................... $5,000,000
Interest expense......................................... $30,000
Total assets, beginning of year .................. $185,000
Total assets, end of year ............................ $215,000
Tax rate ...................................................... 30%
Return on total assets ................................. 15.5%
Tribble Company's net income was:
A) $1,000 C) $22,000
B) $31,000 D) $10,000
Chapter 7 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 7.A - Prob. 1SECh. 7.A - Prob. 2SECh. 7.A - Prob. 3AECh. 7.A - Prob. 4AECh. 7.A - Prob. 5BECh. 7.A - Prob. 6BECh. 7.A - Prob. 7APCh. 7.A - Prob. 8BPCh. 7 - Which duties should be segregated in the...Ch. 7 - Prob. 2DQ
Ch. 7 - Prob. 3DQCh. 7 - Why does the allowance method of accounting for...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - How would the net realizable value of Accounts...Ch. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 1SCCh. 7 - Prob. 2SCCh. 7 - Prob. 3SCCh. 7 - Prob. 4SCCh. 7 - Prob. 5SCCh. 7 - Prob. 6SCCh. 7 - Prob. 7SCCh. 7 - Prob. 8SCCh. 7 - Prob. 9SCCh. 7 - Prob. 10SCCh. 7 - Prob. 11SCCh. 7 - Prob. 12SCCh. 7 - Prob. 1SECh. 7 - Prob. 2SECh. 7 - Prob. 3SECh. 7 - Prob. 4SECh. 7 - Prob. 5SECh. 7 - Prob. 6SECh. 7 - Prob. 7SECh. 7 - Prob. 8SECh. 7 - Prob. 9SECh. 7 - Prob. 10SECh. 7 - Prob. 11SECh. 7 - Prob. 12SECh. 7 - Prob. 13SECh. 7 - Prob. 14SECh. 7 - Prob. 15SECh. 7 - Quick ratio (Learning Objective 7) 510 min....Ch. 7 - Prob. 17SECh. 7 - Prob. 18AECh. 7 - Prob. 19AECh. 7 - Prob. 20AECh. 7 - Prob. 21AECh. 7 - Prob. 22AECh. 7 - Prob. 23AECh. 7 - Prob. 24AECh. 7 - Prob. 25AECh. 7 - Prob. 26AECh. 7 - Prob. 27AECh. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 29AECh. 7 - Prob. 30BECh. 7 - Prob. 31BECh. 7 - Prob. 32BECh. 7 - Prob. 33BECh. 7 - Prob. 34BECh. 7 - Aging of accounts receivable allowance method...Ch. 7 - Prob. 36BECh. 7 - Prob. 37BECh. 7 - Prob. 38BECh. 7 - Prob. 39BECh. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 41BECh. 7 - Prob. 42APCh. 7 - Prob. 43APCh. 7 - Prob. 44APCh. 7 - Prob. 45APCh. 7 - Prob. 46APCh. 7 - Accounting for notes receivable (Learning...Ch. 7 - Prob. 48APCh. 7 - Prob. 49BPCh. 7 - Prob. 50BPCh. 7 - Prob. 51BPCh. 7 - Prob. 52BPCh. 7 - Prob. 53BPCh. 7 - Prob. 54BPCh. 7 - Prob. 55BPCh. 7 - Continuing Exercise In this exercise, we continue...Ch. 7 - Prob. 1CPCh. 7 - Prob. 1CFSAPCh. 7 - Prob. 1EIACh. 7 - Prob. 2EIACh. 7 - Financial Analysis Purpose: To help familiarize...Ch. 7 - Industry Analysis Purpose: To help you understand...Ch. 7 - Prob. 1SBACh. 7 - Prob. 1WC
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