Reference no: EM131814382
Questions -
Q1. Blues Corporation's trial balance included the following account balances at December 31, 2011:
Accounts Payable ........................................ $45,000
Bonds Payable, due 2012 ................................. 75,000
Discount on Bonds Payable, due 2012 ..................... 9,000
Dividends Payable January 31, 2012 ...................... 24,000
Notes Payable, due January 31, 2015 ..................... 60,000
What amount should be included in the current liability section of Blues' December 31, 2011, balance sheet?
a. $135,000
b. $153,000
c. $195,000
d. $234,000
Q2. Information from Blain Company's balance sheet is as follows:
Current assets:
Cash .................................................... $ 1,200,000
Investment securities ................................... 3,750,000
Accounts receivable ..................................... 28,800,000
Inventories ............................................. 33,150,000
Prepaid expenses ........................................ 600,000
Total current assets .................................... $67,500,000
Current liabilities:
Notes payable ........................................... $ 750,000
Accounts payable ........................................ 9,750,000
Accrued expenses ........................................ 6,250,000
Income taxes payable .................................... 250,000
Payments due within one year on long-term debt .......... 1,750,000
Total current liabilities ............................. $18,750,000
What is Blain's quick (acid-test) ratio?
a. 0.26 to 1
b. 0.30 to 1
c. 1.80 to 1
d. 3.60 to 1
Q3. Information from Blain Company's balance sheet is as follows: Current assets:
Current assets:
Cash .................................................... $ 1,200,000
Investment securities ................................... 3,750,000
Accounts receivable ..................................... 28,800,000
Inventories ............................................. 33,150,000
Prepaid expenses ........................................ 600,000
Total current assets .................................... $67,500,000
Current liabilities:
Notes payable ........................................... $ 750,000
Accounts payable ........................................ 9,750,000
Accrued expenses ........................................ 6,250,000
Income taxes payable .................................... 250,000
Payments due within one year on long-term debt .......... 1,750,000
Total current liabilities ............................... $18,750,000
What is Blain's current ratio?
a. 0.26 to 1
b. 0.30 to 1
c. 1.80 to 1
d. 3.60 to 1
Q4. Treasury stock should be reported
a. as a current asset only if it will be sold within the next year or the operating cycle, whichever is longer.
b. as a current asset only if it will be sold within the next year or the operating cycle, whichever is shorter.
c. in the Investments and Funds section of the balance sheet.
d. as a deduction from total stockholders' equity on the balance sheet.
5. Account balances and supplemental information for the Bighorn Corporation as of December 31, 2012, are given below:
Accounts Payable ....................................... $ 75,900
Accounts Receivable .................................... 141,600
Accumulated Depreciation--Equipment .................... 84,000
Bonds Payable .......................................... 300,000
Cash ................................................... 243,900
Common Stock ........................................... 1,560,000
Deferred Income Tax Liability (noncurrent) ............. 6,900
Dividends Payable ...................................... 45,000
Equipment .............................................. 840,000
Income Taxes Payable ................................... 91,500
Inventory .............................................. 395,100
Investment in Land ..................................... 510,000
Investment in Stock of Subsidiary ...................... 492,000
Note Payable ........................................... 120,000
Notes Receivable ....................................... 150,000
Prepaid Insurance ...................................... 7,200
Retained Earnings ...................................... 453,600
Salaries and Wages Payable ............................. 42,900
(a) $300,000 of 12% bonds were sold on November 1, 2012, at par.
(b) 40,000 shares of $30 par value common stock were sold for $1,560,000.
(c) All the equipment was purchased on January 2, 2011. The depreciation rate is 10 percent per year.
(d) 5 percent of accounts receivable are expected to be uncollectible.
(e) A two-year insurance policy was purchased on May 1, 2012, for $7,200.
(f) Accrued interest on $150,000 of short-term notes receivable from customers was $5,100 at December 31, 2012.
(g) $120,000 was borrowed from the bank on a 5-year, 10% note payable dated July 1, 2012. The loan is to be repaid in 10 semiannual payments of $12,000 plus interest, with the first payment due January 1, 2013.
Prepare a properly classified balance sheet in report form for Bighorn Corporation as of December 31, 2012.