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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Here is the partial work sheet for Meyer Mountain Shop.

images

Required

  1. 1. Prepare a statement of owner’s equity (no additional investment).
  2. 2. Prepare a balance sheet.
  3. 3. Determine the amount of the working capital.
  4. 4. Determine the current ratio (carry to two decimal places).

Check Figure

Working capital, $73,602

1.

To determine

Prepare a statement of owners’ equity for MM Shop for the year ended December 31, 20--.

Explanation

Statement of owners’ equity: This statement reports the beginning owner’s equity and all the changes which led to ending owners’ equity. Additional capital, net income from income statement is added to, and drawings is deducted from beginning owner’s equity to arrive at the end result, ending owner’s equity.

Prepare a statement of owners’ equity for MM Shop for the year ended December 31, 20--...

2.

To determine

Prepare a balance sheet for MM Shop, based on the account balances from work sheet, and capital of the owner from the statement of owners’ equity prepared in Part (1).

3.

To determine

Compute working capital of MM Shop (Refer to balance sheet for the values of current assets and current liabilities).

4.

To determine

Compute current ratio of MM Shop (Refer to balance sheet for the values of current assets and current liabilities).

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