Required information On January 1, Year 1, the general ledger of a company includes the following account balances: Credit Accounts Cash Accounts Receivable Supplies Land Accounts Payable Common Stock Retained Earnings Totals Debit $ 25,600 7,000 4,900 68,000 $ 5,000 83,000 17,500 $105,500 $105,500 During Year 1, the following transactions occur: January 2 Purchase rental space for one year in advance, $11,400 ($950/month). January 9 Purchase additional supplies on account, $5,300. January 13 Provide services to customers on account, $27,300. January 17 Receive cash in advance from customers for services to be provided in the future, $5,500. January 20 Pay cash for salaries, $13,300. January 22 Receive cash on accounts receivable, $25,900. January 29 Pay cash on accounts payable, $5,800. 7. Analyze the following features of a company financial condition: a. What is the amount of profit reported for the month of January? Income statement 7. Analyze the following features of a company financial condition: a. What is the amount of profit reported for the month of January? Income statement b. Calculate the ratio of current assets to current liabilities at the end of January. Current ratio c. Based a company financial profit and ratio of current assets to current liabilities, indicate whether a company financial appears to be in good or bad financial condition. Good Bad Required information On January 1, Year 1, the general ledger of a company includes the following account balances: Credit Accounts Cash Accounts Receivable Supplies Land Accounts Payable Common Stock Retained Earnings Totals Debit $ 25,600 7,000 4,900 68,000 $ 5,000 83,000 17,500 $105,500 $105,500 During Year 1, the following transactions occur: January 2 Purchase rental space for one year in advance, $11,400 ($950/month). January 9 Purchase additional supplies on account, $5,300. January 13 Provide services to customers on account, $27,300. January 17 Receive cash in advance from customers for services to be provided in the future, $5,500. January 20 Pay cash for salaries, $13,300. January 22 Receive cash on accounts receivable, $25,900. January 29 Pay cash on accounts payable, $5,800. 7. Analyze the following features of a company financial condition: a. What is the amount of profit reported for the month of January? Income statement 7. Analyze the following features of a company financial condition: a. What is the amount of profit reported for the month of January? Income statement b. Calculate the ratio of current assets to current liabilities at the end of January. Current ratio c. Based a company financial profit and ratio of current assets to current liabilities, indicate whether a company financial appears to be in good or bad financial condition. Good Bad
