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ACC121 Seminar 6 Examples

M94.

Quick Ratio: $20,000 / $90,000 = 0.22


Working Capital: $ 120,000 - $ 90,000 = $ 30,000

ALTERNATE PROBLEMS
AP91.
Req. 1
January 15
Tax expense (+E, -SE) ...................................................
Taxes payable (+L) .....................................................
Deferred tax liability (+L) .............................................

125,000
93,000
32,000

January 31
Interest payable (-L) .......................................................
Cash (-A) ....................................................................

52,000

April 30
Cash (+A) .......................................................................
Note payable (+L) .......................................................

550,000

June 3
Inventory (+A) ................................................................
Accounts payable (+L) ................................................

75,820

July 5
Accounts payable (-L) ....................................................
Cash (-A) ....................................................................

75,820

August 31
Cash (+A) .......................................................................
Revenue (+R, +SE) ....................................................
Deferred revenue (+L) ................................................

52,000

550,000

75,820

75,820
12,000
8,000
4,000

Req. 2
December 31
Interest expense (+E, -SE) .............................................
Interest payable (+L)...................................................

44,000
44,000

Long-term liability (-L) ....................................................


Current liability (+L) ....................................................

100,000

Wage expense (+E, -SE) ...............................................


Wages payable (+L) ...................................................

85,000

100,000

85,000

AP91. (continued)
Req. 3
Balance Sheet:
CURRENT LIABILITIES
Wages Payable

$85,000

Taxes Payable

93,000

Deferred Tax Liability

32,000

Interest Payable

44,000

Deferred Revenue
Note Payable

4,000
550,000

Current Portion of Longterm Debt


100,000
TOTAL CURRENT
LIABILITIES

$908,000

Req. 4
Cash from Operating Activities:
January 15

No effect

January 31

Decreased

April 30

No effect

June 3

No effect

July 5

Decreased

August 31

Increased

All December 31 transactions

No effect