ASSETS Current Assets: LIABILITIES Current Liabilities: Cash in Bank Petty Cash

Question

ASSETS Current Assets: LIABILITIES Current Liabilities: Cash in Bank Petty Cash Net Cash Inventory Accounts Receivable Prepaid Insurance $18,500.00 Accounts Payable $4,800.00 S500.00 Wages Payable $19,000.00 Office Rent $25,400.00 Utilities S14,300.00 S430.00 S5,300.00 Federal Income Tax Payable 5,500.00 Overdrafts $2,600.00 Total Current Assets S55,200.00 Customer Deposits 900.00 720.00 S1,200.00 $24,950.00 sion Payable Union Dues Payable Pen Fixed Assets: Land S150,000.00 Medical Payable 330,000.00 Sales Tax Payable Buildings Less Depreciation Net Land & Buildings $50,000.00 Total Current Liabilities $430,000.00 Long-Term Liabilities: Equipment Less Depreciation Net Equipment $68,000.00 Long-Term Loans 35,000.00 Mortgage 33,000.00 Total Long-Term Liabilities 40,000.00 $155,000.00 $195,000.00 TOTAL LIABILITIES 219,950.00 Owners' Equity: Common Stock Owner Draws Retained Earnings 120,000.00 50,000.00 128,250.00 $298,250.00 Total Owners' Equity: TOTAL ASSETS S518,200.00 LIABILITIES AND EQUITY 518,200.00

Explanation / Answer

Computation of Quick Ratio       Detail Amount Quick Asset Total Current Asset $55,200 Less: Prepaid Insurance -$5,500 Total Quick Asset $49,700 Total Current Liabilities $24,950 Quick Ratio                   1.99 Quick Asset/ Current Liability Computation of Current Ratio Detail Amount Total Current Asset $55,200 Total Current Liabilities $24,950 Current Ratio                   2.21 Current Asset/ Current Liability Computationof Debt ratio Detail Amount Total Liabilities $219,950 Total Asset $518,200 Debt Ratio 0.42 ( Total Liabilities/ Total Asset) Computation of Return on Equity Detail Amount Net Income Total Sharholder Equity $298,250 Return on Equity Net Income/Shareholder equity Note: Net income detail are not provided in Question

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