The following items are taken from the adjusted trial balance of Sutch Video Productions at December 31, 2015: Instructions
a. Calculate the Profit.
b. Calculate the balance of Owner's Equity that would appear on a balance sheet at December 31, 2015.
c. Prepare a classified balance sheet for Sutch Company at December 31, 2015.
d. Calculate the working capital and the current ratio. Which of the two measures is preferable for comparing Sutch's liquidity with competitors'?
e. Calculate the acid-test ratio for the company. What could the company do to improve this ratio?

Question

The following items are taken from the adjusted trial balance of Sutch Video Productions at December 31, 2015:  Instructions 
a. Calculate the Profit.
b. Calculate the balance of Owner's Equity that would appear on a balance sheet at December 31, 2015.
c. Prepare a classified balance sheet for Sutch Company at December 31, 2015.
d. Calculate the working capital and the current ratio. Which of the two measures is preferable for comparing Sutch's liquidity with competitors'?
e. Calculate the acid-test ratio for the company. What could the company do to improve this ratio?

Quizplus · Accepted Answer

The Answer of The following items are taken from the adjusted trial balance of Sutch Video Productions at December 31, 2015:  Instructions 
a. Calculate the Profit.
b. Calculate the balance of Owner's Equity that would appear on a balance sheet at December 31, 2015.
c. Prepare a classified balance sheet for Sutch Company at December 31, 2015.
d. Calculate the working capital and the current ratio. Which of the two measures is preferable for comparing Sutch's liquidity with competitors'?
e. Calculate the acid-test ratio for the company. What could the company do to improve this ratio?

The Following Items Are Taken from the Adjusted Trial Balance