Posted: April 18th, 2016

Explain the change in the company’s liquidity from the beginning to the end of 2012???

Accounts payable ,600
Accounts receivable 6,410
Advertising expense 14,500
Buildings 60,000
Capital stock 50,000
Cash 15,230
Concessions revenue 60,300
Cost of concessions sold 23,450
Dividends paid during the month 8,400
Furniture and fixtures 34,000
Land 26,000
Notes payable 20,000
Projection equipment 25,000
Rent expense�”movies 50,600
Retained earnings 73,780
Salaries and wages expense 46,490
Ticket sales 95,100
Water, gas, and electricity 6,700

1. Prepare an income statement for the month ended September 30, 2012.
2. Prepare a statement of retained earnings for the month ended September 30, 2012.
3. Prepare a balance sheet at September 30, 2012.
4. You have $1,000 to invest. On the basis of the statements you prepared, would you use it to buy stock in Maple Park? Explain. What other information would you want before making a final decision?

Problem 2-4: Financial Statement Ratios

The following items, in alphabetical order, are available from the records of Walker Corporation as of December 31, 2012 and 2011:

12/31/12 12/31/11
Accounts payable 8400 5200
Accounts receivable 27830 35770
Cash 20200 19450
Cleaning supplies 450 700
Interest payable 0 1200
Inventory 24600 26200
Marketable securities 6250 5020
Note payable, due in six months 0 12000
Prepaid rent 3600 4800
Taxes payable 1450 1230
Wages payable 1200 1600

1. Calculate the following as of December 31, 2012 and 2011:
a. Working capital
b. Current ratio

2. On the basis of your answers to (1), comment on the company’s relative liquidity at the beginning and end of the year. Explain the change in the company’s liquidity from the beginning to the end of 2012.