4.

Classified Balance Sheet

The following balance sheet items, listed in alphabetical order, are available from the records of Ruth Corporation at December 31, 2014:

Accounts payable $17,940 Income taxes payable $5,885

Accounts receivable 21,920 Interest payable 1,545

Accumulated depreciation - automobiles 24,630 Inventory 42,190

Accumulated depreciation - buildings 36,160 Land 275,000

Automobiles 123,150 Long-term investments 87,845

Bonds payable, due December 31, 2018 159,000 Notes payable, due June 30, 2015 10,000

Buildings 180,800 Office supplies 2,195

Capital stock, $10 par value 148,000 Paid-in capital in excess of par value 55,000

Cash 13,690 Patents 38,000

Prepaid rent 1,580

Retained earnings 323,860

Salaries and wages payable 4,350

Required:

1. Prepare in good form a classified balance sheet as of December 31, 2014.

Ruth Corporation

Balance Sheet

December 31, 2014

Assets

Current assets:

$

Total current assets

$

Property, plant, and equipment:

$

$

$

Total property, plant, and equipment

Intangible assets:

Total assets

$

Liabilities

Current liabilities:

$

Total current liabilities

$

Long-term debt:

Total liabilities

$

Stockholders' Equity

Contributed capital:

$

Total contributed capital

$

Total stockholders' equity

Total liabilities and stockholders' equity

$

2. Compute Ruth's current ratio. Round your answer to two decimal places.

_________________ to 1

3. On the basis of your answer to (2), does Ruth appear to be liquid?

_________________

5.

eBook

Multiple-Step Income Statement and Profit Margin

The following income statement items, arranged in alphabetical order, are taken from the records of Shaw Corporation for the current year:

Advertising expense $1,380 Interest expense $1,273

Commissions expense 2,592 Interest revenue 1,374

Cost of goods sold 29,251 Rent revenue 6,810

Depreciation expense - office building 2,944 Salaries and wages expenseoffice 11,411

Income tax expense 1,554 Sales revenue 48,216

Insurance expense - salespersons auto 2,151 Supplies expenseoffice 825

Required:

Assume that Shaw Corporation classifies all operating expenses into two categories: (1) selling and (2) general and administrative.

1. Prepare a multiple-step income statement for the current year.

Shaw Corporation

Income Statement

For the Current Year

$

$

Operating expenses:

Selling expenses:

$

Total selling expenses

$

General and administrative expenses:

$

Total general and administrative expenses

Total operating expenses

$

Other revenues and expenses:

$

Excess of other revenues over other expenses

$

$

2. Compute Shaw's profit margin. Round your answer to one decimal place.

_________________ %

6.

eBook

Statement of Cash Flows

Colorado Corporation was organized at the beginning of the year, with the investment of $250,000 in cash by its stockholders. The company immediately purchased an office building for $300,000, paying $210,000 in cash and signing a three-year promissory note for the balance. Colorado signed a five-year, $60,000 promissory note at a local bank during the year and received cash in the same amount. During its first year, Colorado collected $93,970 from its customers. It paid $65,600 for inventory, $20,400 in salaries and wages, and another $3,100 in taxes. Colorado paid $5,600 in cash dividends.

Required:

Prepare a statement of cash flows for the year. If your answer is zero, enter "0". Use the minus sign to indicate cash out flows, a decrease in cash or cash payments.

Colorado Corporation

Statement of Cash Flows

For the First Year

Cash flows from operating activities:

$

Net cash provided by operating activities

$

Cash flows from investing activities:

Cash flows from financing activities:

$

Net cash provided by financing activities

$

Cash at beginning of year

Cash at end of year

$