ACC310- Intermediate Accounting handout sheets Chap 1 to 3

ACC310 - Intermediate Accounting 1 - Fa19 Test #1 - Chap I to 3 - Take-home AC 6) Altoid Co.'s current ratio. Round your answer to two decimal places. (2 pts) 7) Altoid Co.'s acid-test ratio. Round your answer to two decimal places. (2 pts) 8) Altoid Co.'s debt to equity ratio. Round your answer to two decimal places. (2 pts) 9) Altoid Co.'s times interest earned ratio. Round your answer to two decimal places. (2 pts) 10) Altoid Co.'s long term debt to equity ratio. Round your answer to two decimal places. (2 pts) Use this information to answer the following questions: Spartan Sportswear's current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement: Inventories $180,000 Total assets $720,000 Current ratio 2.75 Acid-test ratio 1.5 Debt to equity ratio 1.4 Required: Compute the following for Spartan: 11) Current assets (3 pts) 12) Shareholders' equity (3 pts) Page 4 of 5ACC310 - Intermediate Accounting 1 - Fa19 13) Long-term assets (3 pts) Test #1 - Chap 1 to 3 - Take-home 14) Long-term liabilities (3 pts) 15) Presented below is a partial trial balance for the Messenger Corporation at December 31, 2018. Account Title Cash and cash equivalents Debits Accounts receivable 30,000 Credits Raw materials inventory 192,000 Note receivable 36,000 Interest receivable 125,000 Interest payable 4,000 Marketable securities investments 8,000 Land 48,000 Buildings 100,000 Accumulated depreciation- buildings 1,500,000 740,000 Work in process inventory 38,000 Finished goods inventory 68,000 Equipment 400,000 Accumulated depreciation-equipment 230,000 Franchise (net of amortization) 120,000 Prepaid insurance (for the next year) 60,000 Deferred revenue 48,000 Accounts payable 290,000 Note payable 500,000 Salaries payable 8,000 Allowance for uncollectible accounts 24,000 Sales revenue 900,000 Cost of goods sold 500,000 Salaries expense 48,000 Additional information: 1. The note receivable, along with any accrued interest, is due on November 1, 2019. 2. The note payable is due in 2023. Interest is payable annually. 3. The marketable securities consist of investments in equity securities of other corporations. Management does not intend to sell any of the securities in the next year. 4. Deferred revenue will be recognized equally over the next 18 months Required: Determine the company's working capital at December 31, 2018. (4 pts) Page 5 of 5rake-home ACC310 - Intermediate Accounting 1 - Fa19 Test #1 - Chap 1 to 3 - Take-home 5) Prepare a classified balance sheet for China Tea Company as of December 31, 2018. (5 pts) Use this information to answer the following questions: The balance sheet for Altoid Co. is shown below. Altoid Co. Balance Sheet At December 31, 2018 Assets: Cash $ 150 Short-term investments 200 Accounts receivable (net) 300 Inventories 450 Property, plant, and equipment (net) 1.100 Total assets $2.200 Liabilities and shareholders' equity: Current liabilities $ 450 Long-term liabilities 600 Paid-in capital 150 Retained earnings 1.000 Total liabilities and shareholders' equity $2,200 Selected 2018 income statement information for Altoid Co. includes: Net sales $7, 700 Operating expenses 7110 Income before interest and taxes 590 Interest expense 90 Income tax expense 150 Net income 350 Required (continued on next page): Compute the following financial statement ratios for 2018: Page 3 of 5ACC310 - Intermediate Accounting 1 - Fa19 Use this information to answer the following questions: Test #1 - Chap I to 3 - Takehey. The adjusted trial balance for China Tea Company at December 31, 2018, is presented below: Debit Credit Cash 10,600 Accounts receivable 145,000 Prepaid rent 6,500 Inventory 27,000 Equipment 325,000 Accumulated depreciation-equipment 130,000 Accounts payable 35,000 Notes payable-due in three months 32,000 Salaries payable 4,000 Interest payable 1,000 Common stock 230,000 Retained earnings 45,000 Sales revenue 400,000 Costs of goods sold 190,000 Salaries expense 125,000 Rent expense 18,000 Depreciation expense 25,000 Interest expense 3,200 Advertising expense 1.700 Totals 877,000 877,000 3) Prepare the closing entries for China Tea Company for the year ended December 31, 2018. (1 pt each) 4) Prepare an income statement for China Tea Company for the year ended December 31, 2018. (3 pts) Page 2 of 5Name_ ACC310 - Intermediate Accounting 1 - Fa19 Test #1 - Chap 1 to 3 - Take-home Dr. Christie are as indicated. Prepare your solution to the following problems, making sure to provide calculations as needed. Points 1) Rite Shoes was involved in the transactions described below. Entry" (1 pt each) Required: Prepare the appropriate journal entry for each transaction. If an entry is not needed, state "No 1. Purchased $8,200 of inventory on account. 2. Paid weekly salaries and wages, $920. 3. Recorded sales for the first week: Cash: $7, 100; On account: $5,300. 4. Paid for inventory purchased in event (1). 5. Placed an order for $6,200 of inventory. 2) Flint Hills, Inc. has prepared a year-end 2018 trial balance. Certain accounts in the trial balance do not reflect all activities that have occurred. Required: Prepare adjusting journal entries, as needed, for the following items. (1 point each) 1. The Supplies account shows a balance of $540, but a count of supplies reveals only $210 on hand. 2. Flint Hills initially records the payments of all insurance premiums as expenses. The trial balance shows a balance of $420 in Insurance expense. A review of insurance policies reveals that $125 of insurance is unexpired. 3. Flint Hills employees work Monday through Friday, and salaries of $2,400 per week are paid each Friday. Flint Hills' year-end falls on Tuesday. 4. On December 31, 2018, Flint Hills received a utility bill for December electricity usage of $190 that will be paid in early January of 2019