Venus Apparel, a student-run clothing company based out of Queens University, has the following financial information as
Question:
Venus Apparel, a student-run clothing company based out of Queen’s University, has the following financial information as of December 31, 2021:
• Cash ending balance is $19,530
• Buildings & Equipment ending balance is $105,846
• Accounts Receivables ending balance is $5,722
• Common Shares ending balance is $92,760
• Inventory ending balance is $40,000
• Land ending balance is $278,193
• Accounts Payable ending balance is $12,091
• Retained Earnings ending balance is $114,297
• Buildings & Equipment Accumulated Depreciation ending balance is $47,000
• Wages Payable ending balance is $63,875
• Short-Term Debt ending balance is $10,000
• Taxes Payable ending balance is $23,185
• Long-Term Mortgage ending balance is $48,500
• 10-Year Bond ending balance is $25,500
• Interest Payable ending balance is $12,083
a) Prepare a Balance Sheet for the company as of December 31, 2021. Ensure you categorize your accounts into Current and Non-Current Assets/Liabilities, and Shareholders’ Equity.
b) Explain two different ways that Venus apparel has funded operations. How are you able to tell based on the values and information present in your balance sheet?
c) Calculate the Debt-to-Equity Ratio and Current Ratio for the company. Explain what these ratios are and what they are used for.
d) Comment on the company’s financial position, based on the ratios you calculated.
e) Based on the ratios calculated, would you feel that giving Venus Apparel a short-term loan would be a safe investment? Why or why not?
Expert Answer:
A Balance sheet as on December 31 2021 Liabilities Amount Assets Amount Current liabilities Current ... View the full answer
