UTH FLORIDA UTH

UNIVERSITY
UNIVERSITY

Subject:
General Accounting (MAN 530)- M - Spring B 2023

Tutor:
Master Mario Trejo

Student:
Lic. Heidy Mariela Padilla Mendoza

No. Student:
106255

Career:
Master in Administration and Finance

No. homework:
M2-1

Date:
21-03-2023
Dear teachers, below you are presented with a series of challenges which
you must develop in a clear and orderly manner.
 WEEK 1

Exercise 1

Below are selected accounts for Blossom Irrigation Systems as of December

31, 2011:

Insurance expenses $ 500 Accounts payable $34,000

Notes payable, long term 4,000 Accounts receivable 38,900
Other assets 1,900 Accumulated depreciation: building 44,900
Building 55,000 d. Bloomer, Capital 43,300
Insurance paid in advance 4,600 Accumulated depreciation:
Salary expenses 16,400 equipment 7,800
Salaries to pay 4,100 Cash 11,000
Service revenues 72,900 Interest payable 600
Supplies 3,500 Equipment 25,400
Unearned service revenue 1,600

Is required
1. Prepare the company's classified balance sheet, in report form as of December 31, 2011.
2. Calculate the company's current ratio and debt ratio as of December 31, 2011. As of December
31, 2010, the current ratio was 1.65 and the debt ratio was 0.43. Did your ability to pay debt
improve or deteriorate, or remain the same during 2011?
1. Prepare the company's classified balance sheet, in report form as of
December 31, 2011.

BALANCE SHEET
BLOSSOM IRRIGATION SYSTEMS AS OF DECEMBER 31, 2011
Assets
Current assets
Cash 11,000.00
Accounts Receivable
38,900.00
Supplies 3,500.00
Insurance paid in advance 4,600.00
Total Current Assets
58,000.00
Plant assets
Building 55,000.00
Accumulated building depreciation 44,900.00
10,100.00
Equipment 25,400.00
Accumulated depreciation of 7,800.00 17,600.00
Total Plant Assets 27,700.00
Other assets 1,900.00
TOTAL ASSETS 87,600.00
Passives
Current liabilities
Accounts payable 34,000.00
Salaries to pay 4,100.00
Interest payable 600.00
Unearned service revenue 1,600.00
Total current liabilities 40,300.00
Long term passives
Documents payable L/P 4,000.00
TOTAL LIABILITIES 44,300.00
Shareholders' equity
d. Bloomer, Capital 43,300.00
Total Liabilities + Shareholders' Equity 87,600.00
2. Calculate the company's current ratio and debt ratio as of December 31, 2011.
As of December 31, 2010, the current ratio was 1.65 and the debt ratio was 0.43.
Did your ability to pay debt improve or deteriorate, or remain the same during
2011?

, Total current assets

Current ratio = . .
Total current liabilities
Current Ratio : 58,000.00 = 1.44
40,300.00

, , Total liabilities
Debt ratio =------------------------------,------------
Total assets

Debt ratio : 44,300.00 = 0.50

87,600.00

R// The ability to pay its debts improved while A current ratio that has increased with
respect to the previous period indicates an improvement in the company's ability to pay
its current debts. A low debt ratio is safer than a high debt ratio because a company with
a low level of liabilities is usually required to make low payments and is less likely to
have financial difficulties.

Decision Case 1 A year ago, Ralph Collins founded the Collins onsignment
Sales Company, and the business has prospered ever since. Collins comes to
see you to ask for your advice. He wants to know how much net income the
company made last year. The accounting records consist of the ledger T-
accounts, which were prepared by an accountant who left the company.
Below are the accounts as of December 31:

________Cash___________ Accounts receivable Rent paid in advance Supplies Die 31 5,800 1 Die 31 12,300 I
________Jan 2___________2,800 I Jan 2 2,600 I

_________Equipment___ Accumulated depreciation Accounts payable

Jan 2 52,000 I
1 Die 31 18,500

Unearned service revenue Ralph Collins, Capital Ralph Collins, Retreats

1 Die 31 4,100 1 Jan 2 40,000 Die 31 50,000 1
Service revenues Salary expenses
1 Die 31 80,700 Die 31 17,000 1 Depreciation expense

advertising expense General service expenses Supplies expenses

Die 31 800 1
Salaries to pay
Collins indicates that at the end of the year, clients owe him $1,000 in earned service revenue,
which he expects to collect at the beginning of the following year. Such income has not been re
registered. During the year, he collected $4,100 of service revenue from clients in advance; However,
the business has only earned $800 of that amount. Advertising expenditure for the year was $2,400, and
he used $2,100 of supplies. Collins estimates that the depreciation on the equipment was $7,000 for the
year. As of December 31, he owes his employee $1,200 in earned wages. The owner made no
investments during the year.
Collins expresses concern that withdrawals during the year could have exceeded the company's net
income. To obtain a loan geared toward business expansion, Collins must show the bank that the
business owner's equity has grown from its original balance of $40,000. Did the capital really grow?
You and Collins agree that you will meet again in a week.

Is required
1. Prepare a financial statement to help Collins answer this question. Can he expect to get the loan?
Give your arguments.
 Development Exercise #2

2,600.00 2,100.00
Balance
500.00
Majorization of accounts – T:

5,800.00 12,300.00
1,000.00

Balance 13,300.00

Cash Accounts
receivable
Supplies
2,800.00

Rent paid in advance

Equip
ment
52,000.00

Accumulated equipment depreciation

7,000.00

Accoun to pay Salaries to pay

ts
18,500.00 1,200.00
_ 2,400.00
20,900.00 balance
Unearned service revenue Ralph Collins, capital

4,100.00 40,000.00
800.00
3,300.00 balance
 Ralph Collins retirements Service revenues
50,000.00 80,700.00
1000.00
800.00
82,500.00 balance

Salary expenses Depreciation expense 7,000.00

17,000.00
1,200.00
balance 18,200.00

General service expenses

Advertising expenses 800.00
2,400.00

Supplies expenses
2,100.00
 Collins Onsignment Sales Company Income Statement
At December 31
Income
Service revenues $82,500.00
Bills
Salary expenses 18,200.00
Advertising expenses 2,400.00
Depreciation expense 7,000.00
General service expenses 800.00
Supplies expenses 2,100.00
Total expenses 30,500.00
Net profit 52,000.00

Collins Onsignment Sales Company Statement of Owner's

Equity As of December 31
Ralph Collins, capital December 31 $ 40,000.00
Net profit 52,000.00
Net capital 92,000.00

Ralph Collins, owner withdrawals 50,000.00

Ralph Collins, capital as of December 31 42,000.00

Collins Onsignment Sales Company Balance Sheet

At December 31
Assets Passives
Effective 5,800.00 Accounts payable 20,900.00
Accounts receivable 13,300.00 Salaries to pay 1,200.00
Supplies 500.00 Unearned service 3,300.00
revenue
Equipment 52,000.00 Total liabilities 25,400.00
Depreciation 7,000.00 45,000.00 Capital
Team Accumulation
Rent paid by 2,800.00 Collins Shareholders' 42,000.00
advanced Equity
Total assets 67,400.00 Liabilities + Capital 67,400.00

Can he wait to get the loan?

R// Yes you can, since your capital increased to 42,000.00, thus showing the
company a good profit to obtain the loan.