Computing Balance Sheet Components
Denton Equipment Inc. furnishes you with the following list of accounts.
Accounts Payable |
$ 66,000 |
Accounts Receivable |
40,000 |
Accumulated Depreciation |
44,000 |
Advances to Salespersons |
10,000 |
Advertising Expense |
72,000 |
Allowance for Bad Debts |
10,000 |
Bonds Payable |
80,000 |
Cash |
22,000 |
Certificates of Deposit |
16,000 |
Common Stock (par) |
100,000 |
Deferred Income Tax Liability |
46,000 |
Equipment |
215,500 |
Inventory |
55,000 |
Investment in Rowe Oil Co Stock (40% of outstanding stock owned for control purposes) |
76,500 |
Investment in Siebert Co Stock (trading securities) |
21,000 |
Paid In Capital in Excess of Par |
42,500 |
Premium on Bonds Payable |
6,000 |
Prepaid Insurance |
6,000 |
Rent Revenue |
37,000 |
Rent Revenue Received in Advance (4 months) |
12,000 |
Retained Earnings |
97,500 |
Taxes Payable |
10,000 |
Tools |
52,000 |
Instructions:
1. From the preceding list of accounts, determine working capital, total assets, total liabilities, and owners’ equity per share of stock (75,000 shares outstanding).
2. Assume net income of $20,000. Compute current ratio, debt ratio, and return on equity.