Submitted by: Submitted by segcamaro
Views: 149
Words: 557
Pages: 3
Category: Business and Industry
Date Submitted: 01/08/2013 04:40 PM
Problem 2-3
1)
RUTH CORPORATION
BALANCE SHEET
DECEMBER 31, 2010
Assets
Current assets:
Cash $ 13,230
Accounts receivable 23,450
Inventory 45,730
Prepaid rent 1,500
Office supplies + 2,340
Total current assets $ 86,250
Long-term investments 85,000
Property, plant, and equipment:
Land 250,000
Automobiles $ 112,500
Less: Accumulated
Depreciation - 22,500 90,000
Buildings 200,000
Less: Accumulated
Depreciation - 40,000 + 160,000
Total property, plant, and
equipment 500,000
Intangible assets:
Patents 40,000
Total assets $ 711,250
Liabilities
Current liabilities:
Accounts payable $ 18,255
Income taxes payable 6,200
Interest payable 1,500
Notes payable, due June 30, 2011 10,000
Salaries and wages payable 4,200
Total current liabilities $ 40,155
Long-term debt:
Bonds payable, due December 31,
2014 160,000
Total liabilities $ 200,155
Stockholders' Equity
Contributed capital:
Capital stock, $10 par value $ 150,000
Paid-in capital in excess of par
value 50,000
Total contributed capital 200,000
Retained earnings 311,095
Total stockholders' equity 511,095
Total liabilities and stockholders'
equity $ 711,250
2) Current ratio = Current assets/Current liabilities
$86,250/$40,155 = 2.15 to 1
3) Due to Ruth’s current assets being higher than her current liabilities it seems that her company is liquid. I would like to see her cash flow and more specifically where her assets and liabilities are.
Exercise 2-6
1)
SHAW CORPORATION
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2010
Revenues:
Interest $ 1,340
Rent 6,700
Sales...