The following is the Devil Dog Company adjusted Trail Balance. Devil Dog Company
ID: 2569243 • Letter: T
Question
The following is the Devil Dog Company adjusted Trail Balance.
Devil Dog Company
Adjusted Trial Balance
December 31, 2016
Account Title
Debit
Credit
Cash
$88,450
Accounts Receivable
168,700
Supplies
30,255
Stock Investment
159,000
Equipment
295,285
Accumulated Depreciation
$235,760
Accounts Payable
38,555
Wages Payable
27,000
Capital Stock
205,000
Retained Earnings
146,145
Service Revenue
902,105
Interest Income
1,500
Rent Expense
63,500
Wages Expense
539,260
Supplies Expense
42,520
Depreciation Expense
164,095
Dividends
5,000
_________
Totals
$1,556,065
$1,556,065
What are Devil Dog Company's ratios for the following: (Round all non dollar value ratios to one decimal place. Do not enter the ":1" notation in the answer box. For dollar value ratios enter the dollar sign followed by the whole dollar amount. Any negative dollar value the number must be enclosed in brackets and do not use a minus sign.)
1. Current Ratio
2. Quick Ratio
3. Working Capital
Devil Dog Company
Adjusted Trial Balance
December 31, 2016
Account Title
Debit
Credit
Cash
$88,450
Accounts Receivable
168,700
Supplies
30,255
Stock Investment
159,000
Equipment
295,285
Accumulated Depreciation
$235,760
Accounts Payable
38,555
Wages Payable
27,000
Capital Stock
205,000
Retained Earnings
146,145
Service Revenue
902,105
Interest Income
1,500
Rent Expense
63,500
Wages Expense
539,260
Supplies Expense
42,520
Depreciation Expense
164,095
Dividends
5,000
_________
Totals
$1,556,065
$1,556,065
Explanation / Answer
1)current ratio =current asset /current liability
=446405/65555
= 6.8 :1
**current asset =cash +accounts receivable+supplies+stock investment
= 88450+168700+30255+159000=446405
current liability=accounts payable+wages payable
= 38555+27000
= 65555
**assuming stock investment is short term
2)quick ratio =[Current asset-supplies]/current liability
=[446405-30255]/65555
= 416150/65555
= 6.3 :1
3)working capital =current asset -current liability
= 446405-65555
= $ 380850
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