Sampson Company has $500 in its checking account.

Sampson Company has $500 in its checking account. A customer owes Sampson $1,000. The
company has store equipment that cost $1,500 and a truck that cost $5,000. Sampson Company
owes the bank $3,500 on the truck loan of which one payment of $700 is due in one week, and
owes $4,000 to creditors for its monthly operating expenses, including rent, all of which is due in
the next 30 days.

A.
B.
2.

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List Sampson Company’s assets and the dollar amount of each.
List Sampson Company’s liabilities and the dollar amount of each.

The following are account balances of Marcia Company on 12/31/10.

Accounts payable
Accounts receivable
Buildings and equipment
Contributed capital
Bonds payable
Cash
Retained earnings
Accumulated depreciation
Inventory
Patents

$ 1,000
6,000
54,000
20,000
15,000
8,500
17,000
24,000
5,500
3,000

Prepare a classified balance sheet for Marcia Company on December 31, 2010.

3.
Retained earnings on January 1 was $27,000. During the current year net income is
$160,000. Cash payments for dividends declared totals $145,000. What is the retained earnings
balance on December 31?
4. Madison Company has current assets, current liabilities, and long-term liabilities of $8,000, $4,000,
and $6,000, respectively. Within these amounts, inventory was $2,000, receivables were $2,000, cash was
$4,000, and payables were $1,000. Calculate Madison’s quick ratio. What information does this provide?