CUMULATIVE REVIEW PROBLEM CHAPTER 1 The purpose of this prob

CUMULATIVE REVIEW PROBLEM: CHAPTER 1 The purpose of this problem is to provide an chapter and major concepts in previous chapters. This cumulatice reciere shouald assist you integrating accounting concepts and preparing for eans opportunity to reciee both neve concepts in the current RIQUIRED: Use the following information for the eight questions which follow. Heather Company has the following account balances after adjusting entries at December 31, 2011: Bonds Payable (due 2050 Accounts Payable 137,000 100,000 Treasury Stock, Common (22,000 shares) Preferred Stock ($10 par) 80,000 Paid-in Capital in Excess of Par Value, Preferred Accounts Receivable Common Stock ($1 par) Cost of Goods Sold Unearned Revenue Allowance for Doubtful Accounts Operating Expenses 18000 15,000 Paid-in Cap Retained E of Par Value, Common 40,000 27,000 I. The adjusted trial balance on December 31, 2011, would balance at: 2. The net income for the year is: 3. The total owners\' equity on the December 31, 2011 balance sheet is: 4. The total assets on the December 31, 2011 balance sheet is: 5. The total current assets on the December 31, 2011 balance sheet is 6. The current ratio on December 31, 2011 is: 7. The total debt percentage on December 31, 2011 is

Solution

1. The adjusted trial balance at December 31, 2011 would balance at $ 1,690,000.

2. The net income of the year is $ 125,000.( Sales - Cost of Goods Sold - Operating Expenses)

3. The total owner\'s equity on the December 31, 2011 balance sheet is $ 562,000.

4. The total assets on the December 31, 2011 balance sheet is $ 702,000.

5. The total current assets on the December 31, 2011 balance sheet is $ 282,000.

6. The current ratio on December 31, 2011 is 7.05.

7. The total debt percentage on December 31, 2011 is 19.94 % [ ( Accounts Payable + Unearned Revenue + Bonds Payable ) / Total Assets ]

8. The gross margin percent for 2011 is 23.40 % [( Sales - Cost of Goods Sold ) / Sales]

Heather Company
Adjusted Trial Balance
December 31, 2011
	Debit	Credit
	$	$
Cash	137,000
Accounts Receivable	90,000
Allowance for Doubtful Accounts		15,000
Merchandise Inventory	70,000
Equipment	240,000
Accumulated Depreciation : Equipment		40,000
Land	220,000
Accounts Payable		22,000
Unearned Revenue		18,000
Bonds Payable		100,000
Preferred Stock		80,000
Paid-in Capital in excess of par, Preferred		8,000
Common Stock		400,000
Paid-in capital in excess of par, Common		40,000
Retained Earnings		27,000
Dividends	20,000
Treasury Stock	98,000
Sales		940,000
Cost of Goods Sold	720,000
Operating Expenses	95,000
Totals	$ 1,690,000	$ 1,690,000