1. The following is a December 31, 2016, post-closing trial balance for Culver City Lighting, Inc.

Account Title	Debits	Credits
Cash	68,000
Accounts receivable	52,000
Inventories	58,000
Prepaid insurance	28,000
Equipment	120,000
Accumulated depreciationequipment		47,000
Patent, net	53,000
Accounts payable		18,500
Interest payable		8,500
Note payable (due in 10, equal annual installments)		140,000
Common stock		83,000
Retained earnings		82,000
Totals	379,000	379,000

Calculate the current ratio.

Current Ratio

Numerator	? =	? =	?
Denominator	? =	? =	?

b.	Calculate the acid-test ratio.

Numerator	? =	? =	?
Denominator	? =	? =	?

c.	Calculate the debt to equity ratio.

Numerator	? =	? =	?
Denominator	? =	? =	?

2.

The following are the typical classifications used in a balance sheet:

a.	Current assets	f.	Current liabilities
b.	Investments and funds	g.	Long-term liabilities
c.	Property, plant, and equipment	h.	Paid-in-capital
d.	Intangible assets	i.	Retained earnings
e.	Other assets

Required:

For each of the following 2016 balance sheet items, use the letters above to indicate the appropriate classification category. (If the item is a contra account, select the appropriate letter with a minus sign.)

1.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Accrued interest payable	10.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Supplies
2.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Franchise	11.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Machinery
3.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Accumulated depreciation	12.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Land, in use
4.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Prepaid insurance, for 2017	13.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Deferred revenue
5.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Bonds payable, due in 10 years	14.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	copyrights
6.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Current maturities of long term debt	15.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Preferred stock
7.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Note payable, due in three months	16.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Land, held for speculation
8.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Long term recivables	17.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Cash equivalents
9.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Restricted cash, will be used to retire bonds in 10 years	18.	? a,b,c,d,e,f,g,h,i -a,-b,-c,-d,-e,-f,-g,-h,-i	Wages payable

3.

The following are typical disclosures that would appear in the notes accompanying financial statements. For each of the items listed, indicate where the disclosure would likely appeareither in (A) the significant accounting policies note or (B) a separate note. (The first item is shown as an example.)

1.	Inventory costing method	A or B?
2.	Information on related party transactions	A or B?
3.	Composition of property, plant and equipment	A or B?
4.	Depreciation method	A or B?
5.	Subsequent event information	A or B?
6.	Measurement basis for certain financial instruments	A or B ?
7.	Important merger occurring after year-end	A or B?
8.	Composition of receivables	A or B?

4.

Parkman Sporting Goods is preparing its annual report for its 2016 fiscal year. The companys controller has asked for your help in determining how best to disclose information about the following items:

Required:

Indicate whether the above items should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on the face of the balance sheet.

1.	A related party transaction	A,B,C?
2.	Depreciation method	A,B,C?
3.	Allowance for uncollectible accounts	A,B,C?
4.	Composition of investments	A,B,C?
5.	Composition of long-term debt	A,B,C?
6.	Inventory costing method	A,B,C?
7.	Number of shares of common stock authorized, issued, and outstanding.	A,B,C?
8.	Employee benefit plans.	A,B,C?

5.

The 2016 balance sheet for Hallbrook Industries, Inc., is shown below.

HALLBROOK INDUSTRIES, INC.
Balance Sheet
December 31, 2016
($ in 000s)
Assets
Cash	$	260
Short-term investments		210
Accounts receivable		260
Inventories		370
Property, plant, and equipment (net)		1,600
Total assets	$	2,700
Liabilities and Shareholders Equity
Current liabilities	$	460
Long-term liabilities		410
Paid-in capital		1,050
Retained earnings		780
Total liabilities and shareholders equity	$	2,700

The companys 2016 income statement reported the following amounts ($ in 000s):

Net sales	$	5,200
Interest expense		50
Income tax expense		160
Net income		220

Required:

1.

Calculate the current ratio. (Round your answer to 2 decimal places.)

Current ratio

?

2.	Calculate the acid-test ratio. (Round your answer to 2 decimal places.)

Acid-test ratio

?

3.

Calculate the debt to equity ratio. (Round your answer to 2 decimal places.)

Debt to equity ratio

?

4.

Calculate the times interest earned ratio. (Round your answer to 1 decimal place.)

Times interest earned ratio

? Times

6.

The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the companys controller. As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet.

SANDERSON MANUFACTURING COMPANY Balance Sheet At December 31, 2016 ($ in 000s)
Assets
Current assets:
Cash			$	2,150
Accounts receivable				5,300
Allowance for uncollectible accounts				(1,300	)
Finished goods inventory				6,900
Prepaid expenses				2,100
Total current assets				15,150
Noncurrent assets:
Investments				3,900
Raw materials and work in process inventory				3,150
Equipment				18,000
Accumulated depreciationequipment				(5,100	)
Patent				?
Total assets			$	?
Liabilities and Shareholders Equity
Current liabilities:
Accounts payable			$	6,100
Note payable				5,800
Interest payablenote				1,000
Deferred revenue				4,800
Total current liabilities				17,700
Long-term liabilities:
Bonds payable				6,400
Interest payablebonds				400
Shareholders equity:
Common stock	$	?
Retained earnings		?		?
Total liabilities and shareholders equity				?

Additional information ($ in 000s):

1.	Certain records that included the account balances for the patent and shareholders equity items were lost. However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.4. That is, total liabilities are 140% of total shareholders equity. Retained earnings at the beginning of the year was $5,800. Net income for 2016 was $2,000 and $400 in cash dividends were declared and paid to shareholders.
2.	Management intends to sell the investments in the next six months.
3.	Interest on both the note and the bonds is payable annually.
4.	The note payable is due in annual installments of $1,450 each.
5.	Deferred revenue will be earned equally over the next two fiscal years.
6.	The common stock represents 400,000 shares of no par stock authorized, 340,000 shares issued and outstanding.

Required:

Prepare a complete, corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Sanderson Manufacturing Company

Balance Sheet

At December 31, 2016

($ in 000s, except share data)

Assets, Assets and Shareholders equity, Liabilities, Liabilities and Shareholders equity?