Chapter 2 entinuing Problem 0000 Journalizing transactions, posting to T-accounts, and preparing a trial consulting business of Carl Draper balance (40-50 min] Problem 2-62 continoes with the begun in Problem 1-48. Here you will account for Draper Consulting's transactions as it is actually done in practice. Draper Consulting completed the following transactions during the first half of December, 2012 P2-62 Received $18,000 cash and gave carpital to Draper 2 2 Paid monchly office rent,$55o 3 Paid cash for a Dell compuret $1,800. This equipment is expected Dec o remain in service for five years 4 Purchased office ferniture oo account, $4,200. The furniture should last for five yrars S Purchased suppliecs oo acoouns, 5900 9 Performed consuling ervice for aclient on accoun $1.500 12 Paid uedity cxpeo $250 18 Performed servke for a cli and receised cash of $1.100 1. Open T-accounts: Cash: Accounts receivable Supplies; Equipment; Furnitures Accounts payable; Draper, capital; Draper, deawing: Service revenue: Rent expense; and Vrilities expense 2. Journalize the transactions. Explanations are not required 3. Post to the Taccounts Key all itoms by date, and denote an account balance as Bal. Formal posring references are not required Prepare a trial balance at December 18. In the Continuing Problem of Chapter 3, we will add transactions for the remainder of December and prepare a trial bal- ance at December 31 4. P 6-14 Current assets and current liabilities for companics R and T are as follows. Company Company T $800,000 Cument assets Current ligbilitics Working capital 200,000 ired Evaluate the relative solvency of companics R and T 6-15 The following financial data were taken from the annual financial statements of Smith Co 2007 2009 5 450,000 90,000 1,450,000 1.180,000 S 400,000 300,000 1,500,000 1,020,000 200,000 I 10,000 Curront assets 5 500,000 Current liabilaties Cost of goods sold Accounts receivable 340,000 1.400,000 1,120,00 120,000 105,000 a. Based on these data, calculate the following for 2008 and 2009: I. Working capital 2. Current ratio 3. Acid-lest ratio 4. Accounts reccivable turnover 5. Merchandise inventory tunover 6. Inventory turnover in days b. Evaluate the results of your computations in regard to the short-term liquidity of the firm. P 6-16 Anhe Elizabeth Corporation is engaged in the business of making toys. A high percentage of its products are sold to consumers during November and December. Therefore, retailers need to ovember. The corporation produces on a relatively stable basis dur- ing the yeat in order to retain its skilled empldyees and to minimize its investment in plant and equip- ment. The I nature of its business requires a substantial capacity to store inventory The gross receivables balance at April 30. 2008, was $75,000, and the inventory balance was $350.000,on this date. Sales for the ycar ended Apil 30, 2009, totaled $4,000,000, and the cost of goods sold totaled $1,800,000. Anne Elizabeth Corporation uses a natural business year that ends on April 30. Inventory and accounts feceivable data are given in the following table for the year ended April 30, 2009 Month-End Balanee Inventory $525,000 650,000 Gross Receivables lonth S 60,000 40.000 50,000 60,000 200,000 800,000 1,500,000 1,800,000 1,000,000 600,000 200,000 May 2008 2008 775,000 900,000 975,000 700,000 400,000 25,000 uly 2008 August 2008 October 2008 November 2008 December 2008 January 2009 100,000 150,000 275,000 400,000 February 2009 March 2009 50,000