Reference no: EM133077616
Question - Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows:
Cash $38,400
Marketable securities 108,000
Accounts receivable, net 132,000
Inventory 150,000
Prepaid expenses 16,800
Total current assets $445,200
Accounts payable $135,000
Other accrued liabilities 33,000
Short-term debt 60,000
Total current liabilities $228,000
Required -
A. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019.
B. Summarized here are the transactions/events that took place during the fiscal year ended September 30, 2020. Prepare journal entries for the below transactions
1. Credit sales for the year amounted to $288,000.
2. The cost of goods sold was $187,200.
3. Collected accounts receivable, $302,400.
4. Purchased inventory on account, $201,600.
5. Issued 600 shares of common stock for $22 per share.
6. Wrote off $8,400 of uncollectible accounts using the allowance for bad debts.
7. Declared and paid a cash dividend, $24,000.
8. Sold marketable securities costing $31,200 for $37,200 in cash.
9. Recorded insurance expense for the year, $14,400. The premium for the policy was paid in June 2019.
10. Borrowed cash on a short-term bank loan, $12,000.
11. Repaid principal of $48,000 and interest of $3,600 on a long-term bank loan.
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