Question
The adjusted trial balance of Palm Realtors Ltd. at December 31, 2019, appears below: Palm Realtors Ltd. Adjusted Trial Balance December 31, 2019 Cash $
The adjusted trial balance of Palm Realtors Ltd. at December 31, 2019, appears below:
Palm Realtors Ltd.
Adjusted Trial Balance
December 31, 2019
| Cash |
| $ 8,950 |
|
|
| Accounts receivable |
| 53,530 |
|
|
| Prepaid rent |
| 2,200 |
|
|
| Equipment |
| 45,690 |
|
|
| Accumulated amortization |
|
|
| $ 18,930 |
| Accounts payable |
|
|
| 15,900 |
| Interest payable |
|
|
| 900 |
| Salary payable |
|
|
| 3,500 |
| Income tax payable |
|
|
| 4,700 |
| Note payable (due 2025) |
|
|
| 19,500 |
| Common shares |
|
|
| 8,000 |
| Retained earnings |
|
|
| 29,325 |
| Dividends |
| 30,000 |
|
|
| Commissions |
|
|
| 227,480 |
| Depreciation expense |
| 6,260 |
|
|
| Salary expense |
| 140,500 |
|
|
| Rent expense |
| 26,400 |
|
|
| Interest expense |
| 1,500 |
|
|
| Income tax expense |
| 13,205 |
|
|
| Total |
| $328,235 |
| $328,235 |
Required:
- Compute the current ratio for Palm Realtors Ltd for 2019. Did the company appear to be able to meet its short-term obligations as they come due? Why? (3marks)
Current Ratio =
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McGraw-Hill Education SAT 2017
Authors: Christopher Black, Mark Anestis
1st Edition
1259641651, 978-1259641657
