ID: B me: The Income Statement and Balance Sheet columns below are from the work
ID: 2333052 • Letter: I
Question
ID: B me: The Income Statement and Balance Sheet columns below are from the work sheet of Bleeker Street Bounty for the year ended December 31, 20-, 11. Required: Using the work sheet, compute (a) total current assets, (b) working capital, (c) current ratio, and (d) accounts receivable turmover. (Accounts receivable balance on January 1,20- was $23,200). Round to 2 decimal places. All sales are on account. Bleeker Street Bounty Work Sheet (partial) For the year ended December 31, 20- Income StatementBalance Sh Account Title 2, 3 Accounts Receivable Merchandise Invento Store Supplies Office Supplies id Insurance Store Equi Office Equi Accounts Payable Salaries Payable Long-Term Notes Payable ital Drawin Carlo Income Summa Sales Sales Returns and Allowances Purchases Purchases Returns and Allowances Purchases Discounts Sales Sala Office Salary Expense (general Store Supplies Expense (sellin nse (sellirn 40 Depreciation Expense-Store Equipment sellin 800 Depreciation ExpenseOffice Equipment , 40 Net Income 13Explanation / Answer
a. Calculation of total current assets Assets Amount ($) Cash 12300 Account receivable 25000 Merchandise Inventory 16000 Store Supplies 1100 Office Supplies 600 Prepaid Insurance 1500 Total 56500 b. Working Capital= Current Assets- Current Liabilities $56500-22700 33800 Note : Calculation of total current liabilities Amount ($) Accounts Payable 22300 Salaries Payable 400 Total 22700 c. Current ratio= Current assets/Current Liabilities $ 56500/22700 2.49 times d. Account Receivable turnover Ratio= Net sales/ Average account Receivable Account Receivable turnover Ratio= $61000/24100 2.53 Notes : Net Sales= Sales- sales return $61500-500 61000 Average Account Receivable (Opening account Receivable+ closing Account receivable)/2 ($23200+25000)/2 24100