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Category > Management Posted 22 Dec 2017 My Price 10.00

to evaluate current assets on balance sheet.

Hi guys, i am trying to get the answers for the following questions. i am attacing the screenshot of the previous questioner. it's urgent so i hope you guys answer my question quickly. thank you.

Chapter 4, Question 1

Kwan’s boss has asked him to evaluate his current assets on his balance sheet.

However, Kwan is not exactly sure what his current assets are. Help Kwan by examining

his balance sheet accounts and answering the following questions.

 

Balance Sheet Accounts

Investments

Other Current Liabilities

 

373,256

73,954

 

Building

 

627,998

 

Accounts Payable

 

213,659

 

Long-Term Debt

 

395,315

 

Cash

 

85,976

 

Furnishings and Equipment

Notes Payable

 

308,334

47,858

 

Marketable Securities

 

196,154

 

Paid in Capital

 

486,486

 

Accumulated Depreciation

 

203,144

 

Inventories

Common Stock

 

51,818

133,421

 

Prepaid Expenses

 

15,000

 

Retained Earnings

 

477,500

 

Land

 

309,080

 

Net Receivables

 

40,000

 

Other Assets

 

23,721

 

Current Asset Accounts Dollar Amount

 

Total Current Assets

a. Identify the current assets.

b. List them in the order of liquidity.

c. Calculate Total Current Assets.

d. Explain to Kwan why each current asset is listed in its particular order of

liquidity.

Answers:

a.

b.

c.

d.

 

Chapter 4

Q1

 

Chapter 4, Question 2

Aidan Norton owns Aidan’s Lodge in a rural Midwestern town. His accountant is out with the u,

and Aidan has to develop his balance sheet without his accountant’s help. Using the following

balance sheet accounts, help Aidan complete his balance sheet.

 

Balance Sheet Accounts

Investments

 

1,275,000

 

Paid in Capital

 

3,000,000

 

Other Current Liabilities

 

1,590,000

 

Accumulated Depreciation

 

1,185,000

 

Building

 

3,250,000

 

Inventories

 

380,000

 

Accounts Payable

 

1,460,000

 

Common Stock

 

750,000

 

Long-Term Debt

 

1,800,000

 

Retained Earnings

 

2,865,000

 

Land

 

1,957,500

 

Net Receivables

 

2,675,000

 

Cash

 

587,500

 

Furnishings and Equipment

 

1,850,000

 

Notes Payable

 

335,000

 

Marketable Securities

 

Other Assets

 

840,000

Aidan's Lodge

Balance Sheet December 31, 20XX

 

Assets

Current Assets

 

Liabilities and Owners’ Equity

Current Liabilities

 

Total Current Liabilities

Total Current Assets

Long-Term Liabilities

Property and Equipment

 

Total Liabilities

Owners’ Equity

 

Net Property and Equipment

Total Owners’ Equity

Total Assets

 

Chapter 4

Q2

 

Total Liabilities and Owners’ Equity

 

170,000

 

Chapter 4, Question 3

Rachel owns a franchise restaurant of a large restaurant chain in New England. Help

her calculate a vertical analysis of her balance sheet.

Rachel's Restaurant

Balance Sheet December 31, 20XX

$

Assets

Current Assets

Cash

Marketable Securities

Net Receivables

Inventories

Total Current Assets

Investments

Property and Equipment

Land

Building

Furnishings and Equipment

Less Accumulated Depreciation

Net Property and Equipment

Other Assets

Total Assets

 

%

 

57,317

130,769

80,000

34,545

 

248,837

206,053

418,665

205,556

135,429

15,814

 

Liabilities and Owners’ Equity

Current Liabilities

Accounts Payable

Notes Payable

Other Current Liabilities

Total Current Liabilities

 

142,439

31,905

147,907

 

Long-Term Liabilities

Long-Term Debt

Total Liabilities

 

218,272

 

Owners’ Equity

Common Stock

Paid in Capital

Retained Earnings

Total Owners’ Equity

 

78,947

324,324

318,333

 

Total Liabilities and Owners’ Equity

Rachel has been asked by her regional manager to compare her

balance sheet percentages with the averages of the chain.

Select percentages of the chain are below:

Select Chain Percentages (Vertical Analysis)

Cash

Inventories

Accounts Payable

Notes Payable

 

6.70%

1.30%

10.50%

1.10%

 

a. Compare Rachel’s Cash % with the chain’s %. Is it higher or lower?

What might this mean?

b. Compare Rachel’s Inventories % with the chain’s %. Is it higher or

lower? What might this mean?

c. Compare Rachel’s Accounts Payable % with the chain’s %. Is it

higher or lower? What might this mean?

d. Compare Rachel’s Notes Payable % with the chain’s %. Is it higher

or lower? What might this mean?

Answers:

a.

b.

c.

d.

 

Chapter 4

Q3

 

Chapter 4, Question 4

Rachel’s regional manager (from Question 3) has asked Rachel to calculate a horizontal

analysis of her balance sheet. Help Rachel calculate her horizontal analysis.

Rachel's Restaurant

Balance Sheet December 31, 20XX

Last Year This Year $ Change % Change

Assets

Current Assets

Cash

Marketable Securities

Net Receivables

Inventories

Total Current Assets

 

63,049

104,615

64,000

48,363

 

57,317

130,769

80,000

34,545

 

323,488

 

248,837

 

206,053

418,665

267,223

142,710

 

206,053

418,665

205,556

135,429

 

12,651

 

15,814

 

Current Liabilities

Accounts Payable

Notes Payable

Other Current Liabilities

Total Current Liabilities

 

253,354

38,286

192,279

 

142,439

31,905

147,907

 

Long-Term Liabilities

Long-Term Debt

Total Liabilities

 

102,560

 

218,272

 

Owners’ Equity

Common Stock

Paid in Capital

Retained Earnings

Total Owners’ Equity

 

102,631

421,621

254,666

 

78,947

324,324

318,333

 

Investments

Property and Equipment

Land

Building

Furnishings and Equipment

Less Accumulated Depreciation

Net Property and Equipment

Other Assets

Total Assets

Liabilities and Owners’ Equity

 

Total Liabilities and Owners’ Equity

a. Rachel's regional manager told her to try and decrease her accounts

receivable this year. Did she do this?

b. Rachel's regional manager told her to try and reduce her inventories this year

to be more in line with the chain's average inventories. Did she do this?

c. Rachel's regional manager told her to pay more of her accounts payable this

year. Did she do this?

d. Rachel's regional manager told her to pay off more of her total current liabilities

this year. Did she do this?

e. Based on her ability to achieve the goals outlined in a. through d. above, do

you think Rachel did a good job overall?

Answers:

a.

b.

c.

d.

e.

 

Chapter 4

Q4

Attachments:

Answers

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