Question 1. Prepare the current asset section of a balance sheet.
A list of financial statement items for Schweitz company includes the following: accounts receivable $14,000, prepaid insurance $3,300, cash $12,000, supplies, $3,00, and short-term investments $8,200. Prepare the current assets section of the balance sheet listing in the proper sequence.
Question 2. Compute earnings share.
The following information (in million dollars) is available for The Limited for 2005: Sales revenues $9,408, net income $705, preferred stock dividend $0, average shares outstanding 470 million. Compute the earnings share foe The Limited for 2005.
Question 3. Identify items affecting stockholders equity.
For each of the following events affecting the stockholders equity of Haulmarke, indicate whether the event would: increase retained earnings (IRE), decrease retained earnings (DRE), increase common stock (ICS), or decrease common stock (DCS).
a. Issued new shares of common stock.
b. Paid a cash dividend.
c. Reported net income of $75,000.
d. Reported a net loss of $20,000.
Question 4. Calculate liquidity ratios.
These selected condensed data are taken from a recent balance sheet of Bob Evans Farms (in millions of dollars).
Cash $4.0 Compute working capital and the current ratio.
Accounts receivable 22.3
Inventories 19.5
Other current assets 1.7
Total current assets $47.5
Total current liabilities $145.8
Question 5. Calculate liquidity and solvency ratios.
Randy's Books & Music Inc. reported the following selected information at March 30.
2007
Total current assets $252,787
Total assets 439,832
Total current liabilities 239,625
Total liabilities 376,002
Cash provided by operating activ. 55,472
Calculate (a) the current ratio, (b) the debt to total assets ratio, and (c) free cash flow for March 30,2007. The company paid dividends of $11,000 and spent $24,787 on capitol expenditures.
Question 6. Identify constraints that have been violated.
Herbert Company uses these accounting practices:
Inventory is reported at coast when market value is lower.
Small tools are recorded as plant assets and depreciated.
The income statement shows paper clips expense of $10.
Indicate the accounting constraint, if any, that each practice has violated.