28.03.2023 - 11:17

Following is a list of account titles and balances for Pennington Investment Corporation as of January 31, 2011. Accounts Payable $92,400 Accounts Receivable 158,200 Accumulated Depreciation Buildings 139,500 Accumulated Depreciation Machinery and Equipme

Question:

Following is a list of account titles and balances for Pennington Investment Corporation as of January 31, 2011.

Accounts Payable $92,400
Accounts Receivable 158,200
Accumulated Depreciation Buildings 139,500
Accumulated Depreciation Machinery and Equipment 116,300
Additional Paid-In Capital Common Stock 605,000
Allowance for Doubtful Notes and Accounts Receivable 24,700
Buildings 320,000
Cash Fund for Stock Redemption 17,500
Cash in Banks 8,320
Cash on Hand 96,250
Claim for Income Tax Refund 4,000
Common Stock, $1 par 55,000
Employees’ Income Taxes Payable 4,360
Income Taxes Payable 18,000
Interest Payable 5,790
Interest Receivable 2,700
Inventory 201,500
Investment Securities (trading) 83,750
Investments in Undeveloped Properties 193,500
Land 213,000
Machinery and Equipment 165,500
Miscellaneous Supplies Inventory 4,200
Notes Payable (current) 68,320
Notes Payable (due in 2016) 63,800
Notes Receivable (current) 32,960
Preferred Stock, $5 par 285,000
Prepaid Insurance 3,900
Retained Earnings 11,410
Salaries and Wages Payable 15,700

1. Prepare a properly classified balance sheet.

2. Assume net income of $300,000 and sales of $7,000,000. Compute the current ratio, debt ratio, and asset turnover.

Answers (1)
  • Dale
    April 14, 2023 в 19:48
    1. Properly Classified Balance Sheet Assets: Cash and Cash Equivalents Cash in Banks $8,320 Cash on Hand $96,250 Cash Fund for Stock Redemption $17,500 Total Cash and Cash Equivalents $121,070 Investments Investment Securities (Trading) $83,750 Investments in Undeveloped Properties $193,500 Total Investments $277,250 Accounts Receivable $158,200 Less: Allowance for Doubtful Notes and Accounts Receivable $24,700 Net Accounts Receivable $133,500 Inventory $201,500 Prepaid Expenses $3,900 Property, Plant, and Equipment Land $213,000 Buildings $320,000 Less: Accumulated Depreciation - Buildings $139,500 Net Buildings $180,500 Machinery and Equipment $165,500 Less: Accumulated Depreciation - Machinery and Equipment $116,300 Net Machinery and Equipment $49,200 Total Property, Plant, and Equipment $442,700 Total Assets $1,179,920 Liabilities and Equity: Liabilities: Accounts Payable $92,400 Notes Payable (Current) $68,320 Notes Payable (Due in 2016) $63,800 Employees' Income Taxes Payable $4,360 Salaries and Wages Payable $15,700 Interest Payable $5,790 Income Taxes Payable $18,000 Total Current Liabilities $268,370 Preferred Stock $285,000 Total Liabilities $553,370 Equity: Common Stock, $1 par $55,000 Additional Paid-in Capital - Common Stock $605,000 Retained Earnings $11,410 Total Equity $671,410 Total Liabilities and Equity $1,179,920 2. Financial Ratios: Current Ratio = Current Assets / Current Liabilities Current Assets = Cash and Cash Equivalents + Investments + Accounts Receivable + Inventory + Prepaid Expenses Current Assets = $121,070 + $277,250 + $133,500 + $201,500 + $3,900 Current Assets = $737,220 Current Liabilities = $268,370 Current Ratio = $737,220 / $268,370 Current Ratio = 2.75 Debt Ratio = Total Liabilities / Total Assets Debt Ratio = $553,370 / $1,179,920 Debt Ratio = 0.47 or 47% Asset Turnover = Sales / Total Assets Asset Turnover = $7,000,000 / $1,179,920 Asset Turnover = 5.93
Do you know the answer?
Not sure about the answer?
Find the right answer to the question Following is a list of account titles and balances for Pennington Investment Corporation as of January 31, 2011. Accounts Payable $92,400 Accounts Receivable 158,200 Accumulated Depreciation Buildings 139,500 Accumulated Depreciation Machinery and Equipme by subject Accounting, and if there is no answer or no one has given the right answer, then use the search and try to find the answer among similar questions.
Search for other answers
New questions in the category: Accounting
Authorization
*
*

Password generation