ACCT 301 Connect Homework Chapter 3 solutions complete answers

ACCT 301 Connect Homework Chapter 3 solutions complete answers 

 

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Question 1

 

The following is a December 31, 2021, post-closing trial balance for Culver City Lighting, Inc.

 

Prepare a classified balance sheet for Culver City Lighting, Inc. (Amounts to be deducted should be indicated by a minus sign.)

 

Question 2

 

You have been asked to review the December 31, 2021, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior:

 

An investment of $40,000 is included in current assets. Management has indicated that it has no intention of liquidating the investment in 2022.

 

A $200,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10, equal annual installments with the first installment due on March 31, 2022.

 

Deferred revenue of $90,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2022, and the other one-third in 2023.

 

Determine the appropriate classification of each of these items. (If no entry is required for classification, choose "No entry".)

 

Question 3

 

For each of the following note disclosures, indicate whether the disclosure would likely appear in (A) the summary of significant accounts policies or (B) a separate note.

 

Question 4

 

The following are the typical classifications used in a balance sheet:

 

For each of the following balance sheet items, use the letters above to indicate the appropriate classification category. (If the item is a contra account, select the appropriate letter with a minus sign.)

 

Question 5

 

The following is a December 31, 2021, post-closing trial balance for the Jackson Corporation.

 

Prepare a classified balance sheet for Jackson Corporation at December 31, 2021, by properly classifying each of the accounts. (Amounts to be deducted should be indicated by a minus sign.)

 

Question 6

 

The 2021 balance sheet for Hallbrook Industries, Inc., is shown below.

 

The company’s 2021 income statement reported the following amounts ($ in thousands):

 

1. Calculate the current ratio. (Round your answer to 2 decimal places.)

 

2. Calculate the acid-test ratio. (Round your answer to 3 decimal places.)

 

3. Calculate the debt to equity ratio. (Round your answer to 2 decimal places.)

 

4. Calculate the times interest earned ratio. (Round your answer to 1 decimal place.)

 

Question 7

 

The following is a December 31, 2021, post-closing trial balance for Almway Corporation.

 

The investment in equity securities account includes an investment in common stock of another corporation of $32,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year.

 

The land account includes land which cost $27,000 that the company has not used and is currently listed for sale.

 

The cash account includes $17,000 restricted in a fund to pay bonds payable that mature in 2024 and $25,000 restricted in a three-month Treasury bill.

 

The notes payable account consists of the following:

 

a $32,000 note due in six months.

 

a $52,000 note due in six years.

 

a $52,000 note due in five annual installments of $10,400 each, with the next installment due February 15, 2022.

 

The $62,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $10,000.

 

The common stock account represents 102,000 shares of no par value common stock issued and outstanding. The corporation has 300,000 shares authorized.

 

Prepare a classified balance sheet for the Almway Corporation at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

 

Question 8

 

The following is the ending balances of accounts at December 31, 2021, for the Weismuller Publishing Company.

 

Prepaid expenses include $150,000 paid on December 31, 2021, for a two-year lease on the building that houses both the administrative offices and the manufacturing facility.

 

Investments include $45,000 in Treasury bills purchased on November 30, 2021. The bills mature on January 30, 2022. The remaining $125,000 is an investment in equity securities that the company intends to sell in the next year.

 

Deferred revenue represents customer prepayments for magazine subscriptions. Subscriptions are for periods of one year or less.

 

The notes payable account consists of the following:

 

a $55,000 note due in six months.

 

a $136,000 note due in six years.

 

a $84,000 note due in three annual installments of $28,000 each, with the next installment due August 31, 2022.

 

The common stock account represents 415,000 shares of no par value common stock issued and outstanding. The corporation has 830,000 shares authorized.

 

Prepare a classified balanced sheet for the Weismuller Publishing Company at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

 

Question 9

 

The current asset section of the Excalibur Tire Company’s balance sheet consists of cash, marketable securities, accounts receivable, and inventory. The December 31, 2021, balance sheet revealed the following:

 

Determine the following 2021 balance sheet items:

 

Question 10

 

The current asset section of Guardian Consultant's balance sheet consists of cash, accounts receivable, and prepaid expenses. The 2021 balance sheet reported the following: cash, $1,300,000; prepaid expenses, $360,000; long-term assets, $2,400,000; and shareholders’ equity, $2,500,000. The current ratio at the end of the year was 2.0 and the debt to equity ratio was 1.4.

 

Determine the following 2021 amounts and ratios: (Round your "The acid-test ratio" answer to 1 decimal place.)