Current Assets

E4-1 Match the following terms with the appropriate component of the accounting equation:

(1) Assets (2) Liabilities (3) Shareholders' Equity

A. The probable sacrifices of economic benefits arising from the present obligations of a company to transfer assets or provide services in the future as a result of past transactions or events

B. The residual interest in the assets of a company that remains after deducting its liabilities

C. The probable future economic benefits obtained or controlled by a company as a result of past transactions or events

Plant and Equipment

E4-2 Dorothy Corporation had the following accounts in its year-end adjusted trial balance: Inventories, $23,600; Accounts Receivable, $7,600; Accounts Payable, $7,200; Prepaid Rent, $2,400; Marketable Securities, $3,000; Allowance for Doubtful Accounts, $1,100; and Cash, $1,500. Prepare the current assets section of Dorothy's year-end balance sheet.

Shareholders' Equity

E4-3 Dorothy Corporation had the following accounts in its year-end adjusted trial balance: Accounts Payable, $7,200; Salaries Payable, $5,800; Income Taxes Payable, $4,000; Short-Term Notes Payable, $2,500; Dividends Payable, $750; Investment in Held-to-Maturity Bonds, $2,750; and Allowance for Doubtful Accounts, $1,100. Prepare the current liabilities section of Dorothy's balance sheet.

Classifications on Balance Sheet

E4-4 Based on the information in E4-2 and E4-3, calculate Dorothy Corporation's working capital and current ratio

Balance Sheet

E4-6 Oz Corporation has the following assets at year-end: Patents (net), $26,000; Land, $50,000; Buildings, $175,000; Accumulated Depreciation: Buildings, $57,500; Investment in Held-to-Maturity Bonds, $12,000; Equipment, $95,000; and Accumulated Depreciation: Equipment, $25,000. Prepare the property, plant, and equipment section of Oz's year-end balance sheet.