The following lettered items represent a classification scheme for a balance sheet, and the numbered items represent data found on balance sheets. In the blank next to each account, write the letter indicating to which category it belongs.A. Current assetsB. InvestmentsC. Property, plant, and equipmentD. Intangible assetsE. Current liabilitiesF. Long-term liabilitiesG.Stockholders’ equityH. Not on the balance sheet_____ 1. Accumulated depreciation-equipment_____ 2. Common stock_____ 3. Interest expense_____ 4. Salaries and wages payable_____ 5. Retained earnings_____ 6. Inventory_____ 7. Patents_____ 8. Prepaid insurance_____ 9. Mortgage payable_____10.Land (held for investment)Solution1. C 2. G 3. H 4. E 5. G 6. A 7. D 8. A 9. F 10. BThe following data are taken from the financial statements of Rosen, Inc. as of the end of the year 2017.Accounts payable $ 28,000Accounts receivable $ 66,000Cash $ 24,000Net Income $ 48,000Other current liabilities $ 17,000Wages payable $ 5,000Total Assets $250,000Total Liabilities $175,000Additional information: The average commonshares outstanding during the year was 40,000.Compute the following:Current RatioWorking CapitalEarnings per ShareDebt to Assets RatioSolution(a) Current ratio = Current assets ÷ Current liabilities = $90,000 ÷ $50,000 = 1.8 : 1(b) Working capital = Current assets – Current liabilities = $90,000 – $50,000 = $40,000(c) Earnings per share = (Net income–Preferred dividends) ÷ Average common shares outstanding = $48,000 ÷ 40,000 = $1.20 (d) Debt to assets ratio = Total debt ÷ Total assets = $175,000 ÷ $250,000 =
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