Diane Corporation is preparing its 2015 balance sheet. The company records show

Question

Diane Corporation is preparing its 2015 balance sheet. The company records show the following selected amounts at the end of the accounting period, December 31, 2015: Total assets $ 590,000 Total noncurrent assets 302,000 Liabilities: Notes payable (8%, due in 5 years) 23,000 Accounts payable 50,000 Income taxes payable 11,000 Liability for withholding taxes 3,000 Rent revenue collected in advance 8,000 Bonds payable (due in 15 years) 100,000 Wages payable 8,000 Property taxes payable 4,000 Note payable (10%, due in 6 months) 12,000 Interest payable 500 Common stock 280,000 1) What is the working capital 2) compute quick ratio ( quick assets are 82000)

Explanation / Answer

Data is summarized as Assets Current asset ( Balancing Figure) 288000 Non current Assets 302000 Total Assets 590000 Liabilities Current Liabilities Accounts payable 50000 Income Tax payable 11000 Liability for witholding taxes 3000 Rent Revenue collected in advance 8000 Wages Payable 8000 Property taxes Payable 4000 Notes Payable due In 6 months 12000 Interest Payable 500 Total current liabilities 96500 Non current liabilities Notes Payable due in 5 years 23000 Bonds Payable 100000 Total Non current liabilities 123000 Stockholders equity Common stock 280000 Reserves (Balancing Figure) 90500 Total Liabilities & equity 590000 ( same as total assets) 1) Working capital is caculated as = Current Assets - Current liabilities = 288000 - 96500 = 191500 2) Quict Ratio can be calculated as = Quick assets / current liabilities = 82000 / 96500 = 0.85:1

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.