FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Cowboy Bob Enterprise is an agribusiness that is involved in crop farming and cattle production.
Below shows the financial information obtained by the accounting records.
December 31, 2022
Cash at bank
Owner's withdrawal for personal use
Land
Interest payable
Land mortgage
Inventory (Stocker cattle)
Inventory (Grain in storage)
Machinery
Accumulated depreciation-Machinery
Prepaid rent
Salaries and wages payable
Account payable
Capital
Net income
$
9,000
32,000
225,000
11,000
125,000
40,000
15,000
70,000
10,000
10,000
25,000
40,000
180,000
10,000
December 31, 2021
10,000
49,000
195,000
10,000
130,000
30,000
25,000
80,000
0
1,000
0
50,000
180,000
20,000
a) Use the information above to Prepare the Balance Sheet for Cowboy Bob Enterprises as
at 31 December, 2021 and 2022 in the correct format, and perform a comparative
analysis using horizontal analysis.
b) Based on your comparative analysis, highlight the overall financial Cowboy Bob
Enterprise.
c) Using the Balance Sheet for Cowboy Bob as at December 31 2021 and 2022,
i.
Calculate the current ratio in 2021 and 2022.
ii.
Interpret your results in (i) and highlight if there was a significant change in the
current ratio in 2022 compared to 2021.
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Transcribed Image Text:Cowboy Bob Enterprise is an agribusiness that is involved in crop farming and cattle production. Below shows the financial information obtained by the accounting records. December 31, 2022 Cash at bank Owner's withdrawal for personal use Land Interest payable Land mortgage Inventory (Stocker cattle) Inventory (Grain in storage) Machinery Accumulated depreciation-Machinery Prepaid rent Salaries and wages payable Account payable Capital Net income $ 9,000 32,000 225,000 11,000 125,000 40,000 15,000 70,000 10,000 10,000 25,000 40,000 180,000 10,000 December 31, 2021 10,000 49,000 195,000 10,000 130,000 30,000 25,000 80,000 0 1,000 0 50,000 180,000 20,000 a) Use the information above to Prepare the Balance Sheet for Cowboy Bob Enterprises as at 31 December, 2021 and 2022 in the correct format, and perform a comparative analysis using horizontal analysis. b) Based on your comparative analysis, highlight the overall financial Cowboy Bob Enterprise. c) Using the Balance Sheet for Cowboy Bob as at December 31 2021 and 2022, i. Calculate the current ratio in 2021 and 2022. ii. Interpret your results in (i) and highlight if there was a significant change in the current ratio in 2022 compared to 2021.
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