FINANCIAL ACCOUNTING: TOOLS FOR BUSINES
9th Edition
ISBN: 9781119595649
Author: Kimmel
Publisher: WILEY
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During 2022, Pronghorn Corp entered into the following transactions.
1.
Borrowed $62,200 by issuing bonds.
2.
Paid $8,890 cash dividend to stockholders.
3.
Received $13,900 cash from a previously billed customer for services performed.
4.
Purchased supplies on account for $5,000.
Using the following tabular analysis, show the effect of each transaction on the accounting equation. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-4 for example.)
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
+
Accounts Receivable
+
Supplies
=
Accounts Payable
+
Bonds Payable
+
Common Stock
+
Retained EarningsDividends
(1)
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount…
At the end of a recent year, the gap inc. reported total assets of 7,422 million, current assets as 4,309 million, total liabilities of 4,667, current liabilities of 2,128 million, and stockholder's equity of 2,775 million. What is the current ratio and what does this suggest about the company?
a. The ratio of 1.59 suggests that the Gap has liquidity problemsb. The ratio of 2.02 suggests that The Gap has sufficient liquidityc. The ratio of 1.59 suggests that The Gap has greater current assets than current liabilitiesd. The ratio of 2.02 suggests that The Gap is not able to pay its short-term obligations with current assets
At the beginning of the year, Alex's Electronic Inc. had long-term debt of $280 and total debt of $430. At the end of the year, long-term debt was $255 and total debt was $390. The firm paid $20 of interest during the year. What is the amount of the cash flow to creditors?
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