-Refer to Baloon-E-Tunes

question 225

Essay

$$\begin{array} { l r l r } \text { Retained earnings } & \$ 370,000 & \text { Notes payable (due in 6 years) } & \text { \$120,000 } \\\text { Accumulated depreciation } & 130,000 & \text { Salaries payable } & 10,000 \\\text { Income taxes payable } & 240,000 & \text { Supplies } & 20,000 \\\text { Plant } & 480,000 & \text { Accounts payable } & 360,000 \\\text { Cash } & 110,000 & \text { Inventory } & 330,000 \\\text { Accounts receivable } & 350,000 & \text { Land } & 500,000 \\\text { Common shares } & 600,000 & \text { Prepaid insurance } & 40,000\end{array}$$
-Refer to Baloon-E-Tunes.Calculate the amount of working capital at December 31.What can you learn from the current ratio that you cannot learn from the amount of working capital?

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Definitions:

Executor

An individual appointed to administer the estate of a deceased person, managing the distribution of assets according to the will.

Minor's Section 2503(c) Trust

A trust set up for the benefit of a minor according to Section 2503(c) of the Internal Revenue Code, allowing gifts to be made to the trust without incurring gift taxes.

Qualified Terminable Interest Property Trust

A type of trust that allows an individual to transfer assets to a surviving spouse tax-free upon their death, while controlling the distribution of the estate after the spouse's death.

Uniform Probate Code

A set of laws designed to simplify the probate process and standardize the distribution of an individual's estate across the United States.