Spring Water Corporation has the following selected accounts at March 31, 2020 after posting adjusting entries: Accounts
Question:
Spring Water Corporation has the following selected accounts at March 31, 2020 after posting adjusting entries:
Accounts Payable, March 31, 2020.............................. $ 67,500
Accounts Payable, March 31, 2019……………………. 61,500
Credit Purchases……………………………………….. 625,750
Bank Loan Payable, 3-month....................................... 135,000
Employee Benefits Expense......................................... 6,000
Interest Payable............................................................ 7,550
Mortgage Payable......................................................... 135,000
Income Tax Payable..................................................... 14,000
Instructions
a) Prepare the current liability section of Spring Water Corporation's statement of financial position, assuming $19,500 of the mortgage is payable next year.
b) Calculate the A/P turnover, day’s turnover and working capital. Comment on Spring Water’s liquidity, assuming total current assets are $575,000 and supplier terms are net 30.
Horngrens Accounting
ISBN: 978-0133855371
10th Canadian edition Volume 1
Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo-Ann L. Johnston, Peter R. Norwood