Posted: April 24th, 2016

# Explain the change in the company’s liquidity ?

2. Prepare a statement of retained earnings for the month ended September 30, 2012.

MAPLE PARK THEATRES CORP.
STATEMENT OF RETAINED EARNINGS
FOR THE MONTH ENDED SEPTEMBER 30, 2012

Beginning balance, September 1, 2012
T
T
Ending balance, September 30, 2012

3. Prepare a balance sheet at September 30, 2012
Note: Classify Assets and Liabilities in the order of Liquidity

MAPLE PARK THEATRES CORP.
BALANCE SHEET
SEPTEMBER 30, 2012

Assets
T
T
T
T
T
T
Total assets

Liabilities and Stockholders’ Equity
T
T
T
T
Total liabilities and stockholders’ equity

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?

T
\$ 17,600
6,410
14,500
60,000
50,000
15,230
60,300
23,450
8,400
34,000
26,000
20,000
25,000
50,600
73,780
46,490
95,100
6,700

F
F
C

F
F
F
F
F
C
C

F
F
F
C

F
F
F
F
F
F
C

F
F
F
F
C
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.

STEP 1:
Current Assets FY2012 FY2011
T F F
T F F
T F F
T F F
T F F
T F F
TOTAL C C

Current Liabilities FY2012 FY2011
T F F
T F F
T F F
T F F
T F F
TOTAL C C
STEP 2:
C C
Working Capital

C C
Current Ratio

Explain the change in the company’s liquidity from the beginning to the end of 2012.
T
P3-3

Expert Consulting Services Inc. was organized on March 1, 2012, by two former college roommates. The
corporation provides computer consulting services to small businesses. The following transactions occurred
during the first month of operations: