Business, 02.04.2021 22:30 reagriffis24

The adjusted trial balance for Martell Bowling Alley at December 31, 2017, contains the following accounts: Debit Credit
Buildings $128,800 Common stock $90,000
Accounts receivable 14,520 Retained earnings 25,000
Prepaid insurance 4,680 Accumulated depreciation - buildings 42,600
Cash 18,040 Accounts payable 12,300
Equipment 62,400 Notes payable 97,780
Land 67,000 Accumulated depreciation - equipment 18,720
Insurance expense 780 Interest payable 2,600
Depreciation expense 7,360 Service revenue 17,180
Interest expense 2,600
$306,180 $306,180
1. Prepare a classified balance sheet; assume that $22,000 of the note payable will be paid in 2018.
2. By how much does current assets exceed current liabilities?
3. What percentage of current assets are in the form of cash?
4. Determine the company's liquidity.

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Answer from: queenjay34

Martell Bowling Alley

Balance Sheet

As of December 31, 2017

Assets

Current assets:

Cash $18,040

Accounts receivable 14,520

Prepaid insurance 4,680 $37,240

Equipment 62,400

Accumulated depreciation 18,720 $43,680

Buildings 128,800

Accumulated depreciation 42,600 86,200

Land 67,000 196,880

Total Assets $234,120

Liabilities and Equity

Current liabilities:

Accounts payable 12,300

Interest payable 2,600

Notes payable (short-term) 22,000 $36,900

Notes payable (long-term) 75,780

Total liabilities $112,680

Common stock 90,000

Retained earnings 31,440 $121,440

Total liabilities and equity $234,120

2. The current assets exceed the current liabilities by $340.

3. The percentage of current assets in cash is 48.44%.

4. The company's liquidity = 48.89%

Explanation:

a) Data and Calculations:

Adjusted Trial Balance

As of December 31, 2017

Debit Credit

Cash 18,040

Accounts receivable 14,520

Prepaid insurance 4,680

Equipment 62,400

Accumulated depreciation - equipment $18,720

Buildings 128,800

Accumulated depreciation - buildings 42,600

Land 67,000

Accounts payable 12,300

Interest payable 2,600

Notes payable 97,780

Common stock 90,000

Retained earnings 25,000

Service revenue 17,180

Insurance expense 780

Depreciation expense 7,360

Interest expense 2,600

$306,180 $306,180

Notes payable $ 97,780

Short-term notes payable $22,000

Long-term notes payable $75,780 (97,780 - 22,000)

Service revenue $17,180

Insurance expense 780

Depreciation expense 7,360

Interest expense 2,600 10,740

Net income $6,440

Retained earnings, beginning $25,000

Net income 6,440

Retained earnings, ending $31,440

2. Current assets = $37,240

Current liabilities = 36,900

Working capital = $340

Cash = $18,040

Current assets = $37,240

Percentage of cash in current assets = $18,040/$37,240 * 100 = 48.44%

Liquidity = Cash/Current liabilities = $18,040/$36,900 * 100 = 48.89%

Answer from: Quest

answer; only identify and interpret trends in the marketplace;

Answer from: Quest

answernet income for 2017 will be greater if the inventory quantity declines;

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The adjusted trial balance for Martell Bowling Alley at December 31, 2017, contains the following ac...

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