Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assets Cash and cash equivalents Marketable securities Accounts & notes receivable Inventories Prepaid expenses Deferred taxes Miscellaneous current assets Total current assets $325,000.00 $180,000.00 $420,000.00

image text in transcribed
image text in transcribed
Assets Cash and cash equivalents Marketable securities Accounts & notes receivable Inventories Prepaid expenses Deferred taxes Miscellaneous current assets Total current assets $325,000.00 $180,000.00 $420,000.00 $250,000.00 $150,000.00 $75,000.00 $75,000.00 $1,475,000.00 Liabilities and Owners' Equity Accounts and notes payable Income taxes payable Current portion of long-term debt Uneamed revenue Miscellaneous other payables Total current liabilities $125,000.00 $150,000.00 $125,000.00 $325,000.00 $200,000.00 $925,000.00 Plant, property & equipment Investment in affiliates Other fixed assets Total other assets Long-term debt Capital lease obligations Deferred taxes Total other liabilities $3,100,000.00 $450,000.00 $150,000.00 $3,700,000.00 $3,225,000.00 $1,800,000.00 $500,000.00 $5,525,000.00 Owners' equity Preferred stock Common stock Retained earnings Other equity items Total owners' equity $1,450,000.00 $325,000.00 $375,000.00 $225,000.00 $2,325,000.00 Total assets $7,000,000.00 Total liabilities & owners' equity $7,000,000.00 a) Calculate the current ratio for the balance sheet. Explain if, in general, this would be considered to be a good value and why. b) Calculate the quick ratio for the balance sheet. Explain if, in general, this would be considered to be a good value and why. c) Calculate the working capital for the balance sheet. Explain if, in general, this would be considered to be a good value and why. d) Calculate the debt-to-equity ratio for the balance sheet. Explain if, in general, this would be considered to be a good value and why. c) If MSC Inc. would have been sold on December 31", 2020 for $9,250,000 by buyIT Inc., calculate how much Goodwill would need to be added to the next buy IT Inc. balance sheet. 1) It is not sufficient to make investment decisions based only on the balance sheet. One common weakness of the balance sheet are assets that are known to exist in the company but cannot legally be shown in the balance sheet. Explain and name an example for such a "missing asset" and explain at which point such an asset becomes visible in a balance sheet

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Study Guide For Use With Managerial Accounting

Authors: Ronald M. Copeland, Paul E. Dascher, Jerry R. Strawser, Robert H. Strawser

1st Edition

0873937651, 978-0873937658

More Books

Students also viewed these Accounting questions

Question

Organizing Your Speech Points

Answered: 1 week ago