College Spirit sells sportswear with logos of major universities. At the end of 2009, the following balance
Question:
College Spirit sells sportswear with logos of major universities. At the end of 2009, the following balance sheet account balances were available.
Accounts payable .....................$106,300
Accounts receivable .................. 6,700
Accumulated depreciation on furniture and fixtures ...... 21,700
Bonds payable .................... 180,000
Cash ........................ 14,200
Common stock .................... 300,000
Furniture and fixtures .................. 88,000
Income taxes payable ................... 11,400
Inventory, sportswear ................... 479,400
Long-term investment in equity securities ........... $110,000
Note payable, short-term .................. 50,000
Prepaid rent, building (current) .............. 54,000
Retained earnings, 12/31/2009 ............... 82,900
Required:
1. Prepare a classified balance sheet for College Spirit at December 31, 2009.
2. Compute College Spirit’s working capital and current ratio at December 31, 2009.
Comment on College Spirit’s liquidity.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger