Chapter Three Quiz/Homework Flashcards
what is typical of a BS under IFRS
long term items are listed before current
company ratios were below 1.0 before purchasing supplies on account. after the company’s ____
acid test ratio will decrease
land held for speculation is _____
long term investment
if a company intends to sell stock/equity investment within one year
under CA as short term investment (any remaining amount would be reported under long term investments (or just investments)
investment in debt securities that are treasury bills which mature next year
current assets
if calculating working capital and solving for CA
make sure to account for allowance for uncollectable accounts
where does restricted cash equivalents go on the BS
under cash
Current asset BS example
Cash
restricted cash eqv
investments in es
AR
(____)
Inventory
prepaid
investment in eq sec account of 140,000 includes an investment in CS of another corporation of 45,000 which management intends to hold for at least 3yrs. Balance of these investments is to be sold in coming year
CA, Investment in e.s for 95,000
long term assets: investments in e.s. 45,000
land account of 120,000 includes land which cost 40,000 that the company has not used and is currently listed for sale
long term assets: land (type of investment) for 40,000
PP&E: land 80,000
cash account is 75,000
cash account includes 30,000 restricted in a fund to pay bonds payable that mature in 2027 and 38,000 restricted in a three month treasury bill
current assets:
cash 7,000
restricted cash equivalent 38,000 (because within 3months)
longterm assets
others assets
restricted cash 30,000 (because for BP due in 2027)
assets for BS
CA:
cash
restricted cash equivalents
short term investments
AR
allowance for uncollectible
inventory
prepaid
long term assets/investments:
investments in eq securities
land
PP&E:
land
building
AD
equipment
AD
intangible assets:
patent
other assets:
restricted cash (pay off BP)
types of restricted cash equiv
treasury bills
current ratio format
2.45
working cap format
10,000
quick asset ratio format
2.65
debt to equity rato format
45.67&
times interest earned ratio
6.5 times
