Solution-These financial statement items are for whitnall

These financial statement items are for whitnall

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Reference no: EM13572350

These financial statement items are for Whitnall Corporation at year-end, July 31, 2012.

Salaries and wages payable	$2,080
Salaries and wages expense	57,500
Supplies expense	15,600
Equipment	$18,500
Accounts payable	4,100
Service revenue	66,100
Rent revenue	8,500
Notes payable (due in 2015)	1,800
Common stock	16,000
Cash	29,200
Accounts receivable	9,780
Accumulated depreciation-equipment	6,000
Dividends	4,000
Depreciation expense	4,000
Retained earnings (beginning of the year)	34,000

Instructions

(a) Prepare an income statement and a retained earnings statement for the year. Whitnall Corporation did not issue any new stock during the year.

(b) Prepare a classified balance sheet at July 31.

(d) Suppose that you are the president of Crescent Equipment. Your sales manager has approached you with a proposal to sell $20,000 of equipment to Whitnall. He would like to provide a loan to Whitnall in the form of a 10%, 5-year note payable. Evaluate how this loan would change Whitnall"s current ratio and debt to total assets ratio, and discuss whether you would make the sale.

Reference no: EM13572350

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These financial statement items are for whitnall

Reference no: EM13572350

Reference no: EM13572350

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