Question
Hi guys, i am trying to get the answers for the following questions. i am attacing the screenshot of the previous questioner. it's urgent so
Hi guys, i am trying to get the answers for the following questions. i am attacing the screenshot of the previous questioner. it's urgent so i hope you guys answer my question quickly. thank you.
Chapter 4, Question 1
Kwan?s boss has asked him to evaluate his current assets on his balance sheet.
However, Kwan is not exactly sure what his current assets are. Help Kwan by examining
his balance sheet accounts and answering the following questions.
Balance Sheet Accounts
Investments
Other Current Liabilities
373,256
73,954
Building
627,998
Accounts Payable
213,659
Long-Term Debt
395,315
Cash
85,976
Furnishings and Equipment
Notes Payable
308,334
47,858
Marketable Securities
196,154
Paid in Capital
486,486
Accumulated Depreciation
203,144
Inventories
Common Stock
51,818
133,421
Prepaid Expenses
15,000
Retained Earnings
477,500
Land
309,080
Net Receivables
40,000
Other Assets
23,721
Current Asset Accounts Dollar Amount
Total Current Assets
a. Identify the current assets.
b. List them in the order of liquidity.
c. Calculate Total Current Assets.
d. Explain to Kwan why each current asset is listed in its particular order of
liquidity.
Answers:
a.
b.
c.
d.
Chapter 4
Q1
Chapter 4, Question 2
Aidan Norton owns Aidan?s Lodge in a rural Midwestern town. His accountant is out with the u,
and Aidan has to develop his balance sheet without his accountant?s help. Using the following
balance sheet accounts, help Aidan complete his balance sheet.
Balance Sheet Accounts
Investments
1,275,000
Paid in Capital
3,000,000
Other Current Liabilities
1,590,000
Accumulated Depreciation
1,185,000
Building
3,250,000
Inventories
380,000
Accounts Payable
1,460,000
Common Stock
750,000
Long-Term Debt
1,800,000
Retained Earnings
2,865,000
Land
1,957,500
Net Receivables
2,675,000
Cash
587,500
Furnishings and Equipment
1,850,000
Notes Payable
335,000
Marketable Securities
Other Assets
840,000
Aidan's Lodge
Balance Sheet December 31, 20XX
Assets
Current Assets
Liabilities and Owners? Equity
Current Liabilities
Total Current Liabilities
Total Current Assets
Long-Term Liabilities
Property and Equipment
Total Liabilities
Owners? Equity
Net Property and Equipment
Total Owners? Equity
Total Assets
Chapter 4
Q2
Total Liabilities and Owners? Equity
170,000
Chapter 4, Question 3
Rachel owns a franchise restaurant of a large restaurant chain in New England. Help
her calculate a vertical analysis of her balance sheet.
Rachel's Restaurant
Balance Sheet December 31, 20XX
$
Assets
Current Assets
Cash
Marketable Securities
Net Receivables
Inventories
Total Current Assets
Investments
Property and Equipment
Land
Building
Furnishings and Equipment
Less Accumulated Depreciation
Net Property and Equipment
Other Assets
Total Assets
%
57,317
130,769
80,000
34,545
248,837
206,053
418,665
205,556
135,429
15,814
Liabilities and Owners? Equity
Current Liabilities
Accounts Payable
Notes Payable
Other Current Liabilities
Total Current Liabilities
142,439
31,905
147,907
Long-Term Liabilities
Long-Term Debt
Total Liabilities
218,272
Owners? Equity
Common Stock
Paid in Capital
Retained Earnings
Total Owners? Equity
78,947
324,324
318,333
Total Liabilities and Owners? Equity
Rachel has been asked by her regional manager to compare her
balance sheet percentages with the averages of the chain.
Select percentages of the chain are below:
Select Chain Percentages (Vertical Analysis)
Cash
Inventories
Accounts Payable
Notes Payable
6.70%
1.30%
10.50%
1.10%
a. Compare Rachel?s Cash % with the chain?s %. Is it higher or lower?
What might this mean?
b. Compare Rachel?s Inventories % with the chain?s %. Is it higher or
lower? What might this mean?
c. Compare Rachel?s Accounts Payable % with the chain?s %. Is it
higher or lower? What might this mean?
d. Compare Rachel?s Notes Payable % with the chain?s %. Is it higher
or lower? What might this mean?
Answers:
a.
b.
c.
d.
Chapter 4
Q3
Chapter 4, Question 4
Rachel?s regional manager (from Question 3) has asked Rachel to calculate a horizontal
analysis of her balance sheet. Help Rachel calculate her horizontal analysis.
Rachel's Restaurant
Balance Sheet December 31, 20XX
Last Year This Year $ Change % Change
Assets
Current Assets
Cash
Marketable Securities
Net Receivables
Inventories
Total Current Assets
63,049
104,615
64,000
48,363
57,317
130,769
80,000
34,545
323,488
248,837
206,053
418,665
267,223
142,710
206,053
418,665
205,556
135,429
12,651
15,814
Current Liabilities
Accounts Payable
Notes Payable
Other Current Liabilities
Total Current Liabilities
253,354
38,286
192,279
142,439
31,905
147,907
Long-Term Liabilities
Long-Term Debt
Total Liabilities
102,560
218,272
Owners? Equity
Common Stock
Paid in Capital
Retained Earnings
Total Owners? Equity
102,631
421,621
254,666
78,947
324,324
318,333
Investments
Property and Equipment
Land
Building
Furnishings and Equipment
Less Accumulated Depreciation
Net Property and Equipment
Other Assets
Total Assets
Liabilities and Owners? Equity
Total Liabilities and Owners? Equity
a. Rachel's regional manager told her to try and decrease her accounts
receivable this year. Did she do this?
b. Rachel's regional manager told her to try and reduce her inventories this year
to be more in line with the chain's average inventories. Did she do this?
c. Rachel's regional manager told her to pay more of her accounts payable this
year. Did she do this?
d. Rachel's regional manager told her to pay off more of her total current liabilities
this year. Did she do this?
e. Based on her ability to achieve the goals outlined in a. through d. above, do
you think Rachel did a good job overall?
Answers:
a.
b.
c.
d.
e.
Chapter 4
Q4
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