These items are taken from the accounting records of Entity Z at its December 31, 2023 year
Question:
These items are taken from the accounting records of Entity Z at its December 31, 2023 year end.
Accounts payable $3,450
Accounts receivable 7,320
Building 71,800
Accumulated depreciation—building 21,000
Depreciation expense 6,000
Cash 4,080
Common stock 40,000
Dividends 36,000
Sales revenue 99,650
Income tax expense 10,000
Income taxes payable 8,000
Insurance expense 3,784
Land (on which the building sits) 41,850
Note payable (due in 2028) 2,000
Patent 9,000
Prepaid insurance 1,188
Retained earnings, beginning 53,070
Salaries and wages expense 23,850
Salaries and wages payable 1,650
Supplies 228
Supplies expense 1,320
Tesla common stock (long-term investment) 11,000
Utility expense 1,400
Instructions:
In good form (include headings), prepare an income statement, a retained earnings statement, and a classified balance sheet as of December 31, 2023. Then compute the current ratio and the debt-to-total-assets ratios identifying which is a measure of liquidity and which is a measure of solvency.
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello