The current
asset section of Seifert & Seifert, CPA’s balance sheet consists of cash,
accounts receivable, investments, and prepaid expenses. The 2011 balance sheet
reported the following: cash, $110,000;
investments, $22,000; prepaid expenses, $18,000; noncurrent assets, $422,000;
and shareholders’ equity, $350,000. The current
ratio at the end of the year was 1.6 and the debt to equity ratio was .8.
Required:
Determine the following 2011 amounts and ratios:
a. Current
liabilities.
b. Long-term
liabilities.
c. Accounts
receivable.
d. The
acid-test ratio.
TUTORIAL PREVIEW
a.
Calculation of current
Liabilities:
Debt to equity ratio = Total Liabilities/ Shareholders’ equity = 0.8
Total Liabilities = 0.8 x 350,000 = 280,000
File name: Seifert & Seifert.doc File type: .doc PRICE: $10
