Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Textbook Question
Chapter 5, Problem 8AP
The information that follows is from Rodriguez’s Tools Company’s April 30, 2014,
REQUIRED
- 1. Prepare a classified
balance sheet for Rodriguez’s Tools. - 2. BUSINESS APPLICATION ▶ Compute Rodriguez’s Tools’
current ratio and debt to equity ratio. (Round to one decimal place.) - 3. BUSINESS APPLICATION ▶ As a user of the classified balance sheet, why would you want to know the current ratio or the debt to equity ratio?
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The activity below will help you check how much you know about the key elements
of the Statement of Financial Position (SFP).
Activity 1: "HULA ME"
Directions:
1. Guess the account title being described in each sentence.
2. Identify what element of SFP (Assets, Liabilities or Equity) it is listed/ included.
3. Write your answers on the columns provided.
Description
Account title
SFP Element
I am used as a medium of
exchange in business
transactions. I may be held on
hand or put in banks for
safekeeping.
2.
1.
I can be in the form of cash or
other assets invested by the
owner to start- up a business.
3.
I am items held for resale.
4.
I
am
expenses
paid
in
advance.
5.
I am expenses incurred but
not yet paid.
6.
I am amounts due to suppliers
for the purchase of goods or
services received on account.
7.
I am an amount taken by the
owner from the business for
personal use.
8.
I am an
account due with
supporting promissory notes.
I am
9.
an account due from
customers as a result…
Part B: Owner's Equity
Examine the following fictitious equity scenarios. Following the report form balance sheet format, prepare
only the owner's equity section for each owner. Use spreadsheet software, such as Excel, and use the
provided Total Liabilities value to determine the new capital balance and Total Liabilities and Owner's Equity
value. Be sure to use formulas for all calculations.
Save your workbook as "OESections_YourName". Label the individual tabs accordingly: "Sit1", "Sit2" and
"Sit3".
Situation
Owner
Fiscal
Period
Total
Liabilities
Beginning
Capital
Net
Income/
Drawings
Net Loss
Year ended
1
H. Campbell December
$10 000
$31 560
$42 500
$5 200
31, 20-
Month
2
T. Smyth
ended May
$14 200
$78 256
-$2 100
$125
31, 20-
Quarter
ended
2
K. Dearing
$59 250
March 31,
20-
$125 645
$6 200
$1 250
Netflix, Inc. , is the world’s leading Internet subscription service for movies and TV shows. Thefollowing are several of the accounts included in a recent balance sheet:1. Accrued Liabilities2. Prepaid Rent3. Cash4. Common Stock5. Note Payable (long-term)6. Equipment7. Retained Earnings8. Accounts PayableRequired:1. Indicate how each account normally should be categorized on a classified balance sheet. UseCA for current asset, NCA for noncurrent asset, CL for current liability, NCL for noncurrentliability, and SE for stockholders’ equity.2. Indicate whether the account normally has a debit or credit balance.
Chapter 5 Solutions
Principles of Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 1SECh. 5 - Prob. 2SECh. 5 - Tell whether each of the following accounts is a...
Ch. 5 - Prob. 4SECh. 5 - Prob. 5SECh. 5 - Prob. 6SECh. 5 - Prob. 7SECh. 5 - The lettered items that follow represent a...Ch. 5 - Each of the statements that follow violates one or...Ch. 5 - The lettered items that follow represent a...Ch. 5 - Prob. 4EACh. 5 - Prob. 5EACh. 5 - Prob. 6EACh. 5 - Prob. 7EACh. 5 - Prob. 8EACh. 5 - Prob. 1PCh. 5 - The information that follows is from Jasons...Ch. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5APCh. 5 - The information that follows is from Matts...Ch. 5 - Prob. 7APCh. 5 - The information that follows is from Rodriguezs...Ch. 5 - Prob. 1CCh. 5 - Prob. 2CCh. 5 - Prob. 3CCh. 5 - Prob. 4CCh. 5 - Prob. 5C
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