Kruses 2010 balance sheet........... Accounts payable- 55,000......... marketabl
ID: 2357934 • Letter: K
Question
Kruses 2010 balance sheet........... Accounts payable- 55,000......... marketable securities-40,000................ accounts receivable-180,000........... notes payable, 12%, due in 60 days-20,000............ captial stock-1,150,000............ salaries payable-10,000............. cash-15,000.......... equipment-950,000............ taxes payable-15,000............ retained earnings-250,000................. inventory-85,000.................... allowance for doubtful accounts-20,000............. land-600,000......... 1. Prepare a current liabilites section of Kruses 2010 balance sheet.......... 2. Compute Kruses working capital 3. Compute Kruses current ratio. What does this ratio indicate about Kruses condition.Explanation / Answer
Total current liabilities $100,000
2. $300,000* $100,000
Working Capital = Current Assets Current Liabilities = = $200,000 *Current Assets = 15,000
Accounts receivable 180,000
Less: Allowance for doubtful accounts Marketable securities 85,000 2 (20,000) 40,000
Inventory Cash
$300,000 3. $300,000/$100,000
Current Ratio = Current Assets/Current Liabilities = = 3:1
It seems that Kruse has sufficient current assets to meet its short-term obligations
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