Accumulated depreciation (5,500) 43,500 Total assets $ 62,200 LIABILITIES Current liabilities: Accounts payable $ 4,500 Salary payable 500 Unearned service revenue 5,100 Total current liabilities 10,100 Long-term liabilities: Long-term note payable 4,400 Total liabilities 14,500 OWNER’S EQUITY capital 47,700 O’Brion, Total liabilities and $ 62,200 owner’s equity Req. 2 2012 2011 Total current assets $18,700 Current Ratio = = = 1.85 1.49 Total current liabilities $10,100 Since the current ratio was 1.49 one year ago, during the current year, Brian O’Brion Dance Studio’s ability to pay its current liabilities has improved. Total liabilities $14,500 Debt Ratio = = = 0.23 0.29 Total assets $62,200
Accumulated depreciation (5,500) 43,500 Total assets $ 62,200 LIABILITIES Current liabilities: Accounts payable $ 4,500 Salary payable 500 Unearned service revenue 5,100 Total current liabilities 10,100 Long-term liabilities: Long-term note payable 4,400 Total liabilities 14,500 OWNER’S EQUITY O’Brion, capital 47,700 Total liabilities and owner’s equity $ 62,200 Req. 2 2012 2011 Current Ratio = Total current assets Total current liabilities = $18,700 $10,100 = 1.85 1.49 Since the current ratio was 1.49 one year ago, during the current year, Brian O’Brion Dance Studio’s ability to pay its current liabilities has improved. Debt Ratio = Total liabilities Total assets = $14,500 $62,200 = 0.23 0.29
9e-HW-04.docx