Additional data: 1. The beginning balance of accounts receivable is $12,750. 2.

Question

Additional data: 1. The beginning balance of accounts receivable is $12,750.

2. The amount of total assets at the beginning of the year is $145,921.

3. Salaries expense is 65% selling and 35% administrative.

4. Insurance expense is 50% selling and 50% administrative.

5. A physical inventory was conduced for year ended December 31, 2008 and the inventory was valued at $38,100.

6. Rent expense, utilities expense, and property tax expense are administrative expenses.

7. $15,000 of the notes payable is due for payment next year.

1) Journalize the adjusting entries that were made by the company.

2) Prepare a multiple-step income statement and a retained earnings statement for the year and a classified balance sheet as of December 31, 2008.

3) Journalize the closing entries.

4) Prepare a post-closing trial balance.

5) Show work for: a) Current Ratio b) Quick Ratio c) Working Capital d) Accounts Receivable Turnover e) Average Collection Period f) Inventory Turnover g) Days in Inventory h )Debt to Total Assets Ratio i) Gross Profit Ratio j) Profit Margin Ratio k) Return on Assets Ratio l) Asset Turnover Ratio

Accounts Receivable Accumulated Depreciation-Delivery Equipment Accumulated Depreciation-Store Equipment Depreciation Expense-Delivery Equipment Depreciation Expense-Store Equipment Merchandise Inventory 630,500 Purchase Returns and Allowances Sales Commissions Payable Sales Returns and Allowances 12,500

Explanation / Answer

current Ratio = current assets/current liabilities

138480/68215=3.6 : 1

Quick Ratio = 30380/68215= 0.44 : 1

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