CUMULATIVE REVIEW PROBLEM: CHAPTER 1 The purpose of this problem is to provide a
ID: 2393336 • Letter: C
Question
CUMULATIVE REVIEW PROBLEM: CHAPTER 1 The purpose of this problem is to provide an chapter and major concepts in previous chapters. This cumulatice reciere shouald assist you integrating accounting concepts and preparing for eans opportunity to reciee both neve concepts in the current RIQUIRED: Use the following information for the eight questions which follow. Heather Company has the following account balances after adjusting entries at December 31, 2011: Bonds Payable (due 2050 Accounts Payable 137,000 100,000 Treasury Stock, Common (22,000 shares) Preferred Stock ($10 par) 80,000 Paid-in Capital in Excess of Par Value, Preferred Accounts Receivable Common Stock ($1 par) Cost of Goods Sold Unearned Revenue Allowance for Doubtful Accounts Operating Expenses 18000 15,000 Paid-in Cap Retained E of Par Value, Common 40,000 27,000 I. The adjusted trial balance on December 31, 2011, would balance at: 2. The net income for the year is: 3. The total owners' equity on the December 31, 2011 balance sheet is: 4. The total assets on the December 31, 2011 balance sheet is: 5. The total current assets on the December 31, 2011 balance sheet is 6. The current ratio on December 31, 2011 is: 7. The total debt percentage on December 31, 2011 isExplanation / Answer
1. The adjusted trial balance at December 31, 2011 would balance at $ 1,690,000.
2. The net income of the year is $ 125,000.( Sales - Cost of Goods Sold - Operating Expenses)
3. The total owner's equity on the December 31, 2011 balance sheet is $ 562,000.
4. The total assets on the December 31, 2011 balance sheet is $ 702,000.
5. The total current assets on the December 31, 2011 balance sheet is $ 282,000.
6. The current ratio on December 31, 2011 is 7.05.
7. The total debt percentage on December 31, 2011 is 19.94 % [ ( Accounts Payable + Unearned Revenue + Bonds Payable ) / Total Assets ]
8. The gross margin percent for 2011 is 23.40 % [( Sales - Cost of Goods Sold ) / Sales]
Heather Company Adjusted Trial Balance December 31, 2011 Debit Credit $ $ Cash 137,000 Accounts Receivable 90,000 Allowance for Doubtful Accounts 15,000 Merchandise Inventory 70,000 Equipment 240,000 Accumulated Depreciation : Equipment 40,000 Land 220,000 Accounts Payable 22,000 Unearned Revenue 18,000 Bonds Payable 100,000 Preferred Stock 80,000 Paid-in Capital in excess of par, Preferred 8,000 Common Stock 400,000 Paid-in capital in excess of par, Common 40,000 Retained Earnings 27,000 Dividends 20,000 Treasury Stock 98,000 Sales 940,000 Cost of Goods Sold 720,000 Operating Expenses 95,000 Totals $ 1,690,000 $ 1,690,000