1) Cash To Current Assets Ratio = Cash / Current Assets
Cash To Current Assets Ratio = 1,38,515 / 1,43,180 = 96.74%
2) Cash to Total Assets = Cash / Total Assets
Cash to Total Assets = 1,38,515 / $1,45,884.17 = 94.95%
3) Current Ratio = Current Assets / Current Liabilities
Current Ratio = 1,43,180 / 410 = 349.22%
4) Net Profit ratio = Net income / Net Sales
Net Profit ratio = ?
Consider how well the company is positioned to meet current liabilities.
Be sure to include the percentage of revenues that result in profitet income and the current ratio when discussing profitability and liquidity based on the recorded months results.
Consider key points in your observations of results: is the company operating profitably (what percent of revenues result in profitet income)? How well-poised are they to meet liabilities (discuss liquidity and current ratio)?
A Company Balance Sheet As of March 31,20XX Assets Liabilities and Owners' Equity Current Assets: Current Liabilities: \begin{tabular}{l|r|} \hline Cash & 138,515.00 \\ \hline Accounts Receivable & 3,500.00 \\ \hline Office Supplies & 215.00 \\ \hline Prepaid rent & 950.00 \\ \hline & \\ \hline Total Current Assets & 143,180.00 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Accounts Payablle & 135.00 \\ \hline Salaries Payable & 275.00 \\ \hline Total Current Liabilities & 410.00 \\ \hline \multicolumn{2}{|l|}{ Long Term Liabilities: } \\ \hline Total Long Term Liabilities: & 125,000.00 \\ \hline \end{tabular} Total Liabilities: Owner's Equity Non-Current Assets: \begin{tabular}{|l|r|} \hline Owners Capital & 20,474.17 \\ \hline & \\ \hline & \\ \hline Total Equity & 20,474.17 \\ \hline \end{tabular} \begin{tabular}{l|r|} \hline Furniture & 2,750.00 \\ \hline Accumulated depriciation & (45.83) \\ \hline Total Non Current/Fixed Assets & 2,704.17 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Total Assets: & 145,884.17 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Total Liabilities \& Equity & 145,884.17 \\ \hline \end{tabular} A Company Closing Entries Month ending 03/31/20XX \begin{tabular}{|c|l|c|r|} \hline & & & \\ \hline Date & \multicolumn{1}{|c|}{ Accounts } & Debit & Credit \\ \hline 31-Mar & Service Revenue & 6,225.00 & \\ \hline & Income Summary & & 6,225.00 \\ \hline & Close revenues & & \\ \hline & & & \\ \hline 31-Mar & Income Summary & 3,000.83 & \\ \hline & Rent Expense & & 950.00 \\ \hline & Business License & & 250.00 \\ \hline & Depreciation Expense & & 45.83 \\ \hline & Insurance Expense & & 750.00 \\ \hline & Repairrs and Maintenance Expense & & 95.00 \\ \hline & Advertising Expense & & 500.00 \\ \hline & Wages Expense & & 275.00 \\ \hline & Utilities Expense & & 135.00 \\ \hline & Close Expenses & & \\ \hline & & & \\ \hline 31Mar & Income Summary & & \\ \hline & Owner's Capital & & \\ \hline & Close Income Summary & & \\ \hline & & & \\ \hline 31Mar & & & \\ \hline & Divner's Capital & & \\ \hline & Close Dividends & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} Company Name Statement of Owner's Equity Period Ending 03/31/20XX A Company Income Statement For Month ending 3/31/20XX Revenues \begin{tabular}{|c|lr|} \hline Service revenue & $ & 6,225.00 \\ \hline Total Revenues & & \\ \hline \end{tabular} Operating Expenses: Business License expense Depreciation Expense Salaries and Wage Expense Utilities Expense Advertising Repairs and Maintenance Rent expense Insurance expense \begin{tabular}{|lr|} \hline$ & 250.00 \\ \hline$ & 45.83 \\ \hline$ & 275.00 \\ \hline$ & 135.00 \\ \hline$ & 500.00 \\ \hline$ & 95.00 \\ \hline$ & 950.00 \\ \hline$ & 750.00 \\ \hline & \\ \hline & 3,000.83 \\ \hline \end{tabular} Total Operating Expenses: 3,224.17 Trial Balance As of 03/31/20XX Unadjusted trial balance \begin{tabular}{|l|r|r} \hline \multicolumn{1}{c|}{ Account } & \multicolumn{1}{c|}{ Debit } & Credit \\ \hline Cash & 140,415.00 & \\ \hline Accounts Receivable & 3,500.00 & \\ \hline Prepaid Rent & (950.00) & \\ \hline Office Furniture & 2,750.00 & \\ \hline Office Supplies & 215.00 & \\ \hline Accumulated Depreciation & (45.83) & \\ \hline Notes Payable & & 125,000.00 \\ \hline Accounts Payable & & 135.00 \\ \hline Wages Payable & & 275.00 \\ \hline Owner's Capital & & 17,750.00 \\ \hline Owner Draws & 500.00 & \\ \hline Service Revenue & & \\ \hline Rent Expense & 950.00 & \\ \hline Business License Expense & 250.00 & \\ \hline Depreciation Expense & 45.83 & \\ \hline Insurance Expense & 750.00 & \\ \hline Repairs and Maintenance Expense & 95.00 & \\ \hline Advertising Expense & 500.00 & \\ \hline Wages Expense & 275.00 & \\ \hline Utilities Expense & 135.00 & \\ \hline Total: & 149,385.00 & 149,385.00 \\ \hline \end{tabular} A Company General Journal Entries
