The summary financial statements of Bridgeport Ltd. on December 31, 2023, are as follows: BRIDGEPORT LTD Statement
Question:
The summary financial statements of Bridgeport Ltd. on December 31, 2023, are as follows:
BRIDGEPORT LTD | |
Statement of Financial Position | |
December 31, 2023 | |
Assets | |
Cash | $14,000 |
Accounts and notes receivable | 57,000 |
Inventory | 80,000 |
Property, plant, and equipment (net) | 123,000 |
$274,000 | |
Liabilities and Shareholders' Equity | |
Accounts and notes payable | $67,000 |
Long-term debt | 60,000 |
Common shares | 60,000 |
Retained earnings | 87,000 |
$274,000 |
The following errors were made by the inexperienced accountant on December 31, 2022, and were not corrected.
The inventory was overstated by $12,000.
A prepaid expense of $2,600 was omitted. (It was fully expensed in 2022.)
Accrued revenue of $2,300 was omitted. (It was recognized when cash was received in 2023.)
A supplier's invoice for $1,800 for purchases made in 2022 was not recorded until 2023.
On December 31, 2023, there were further errors:
The inventory was understated by $17,700.
A prepaid expense of $800 was omitted.
Accrued December 2023 salaries of $1,900 were not recognized.
Unearned income of $2,300 was recorded in the 2023 revenue.
In addition, it was determined that $ 19,900 of the accounts payable were long-term, and that a $400 dividend was
reported as dividend expense and deducted in calculating net income.
The net income reported on the books for 2023 was $58,000.
Calculate the working capital, current ratio, and debt to equity ratio for Bridgeport based on the original SFP information
provided above. (Round Current ratio and Debt-to-equity ratio to 2 decimal places, e.g. 52.75.)
Working capital $
Current ratio to 1
Debt-to-equity ratio to 1