Accounts payable 480,000.

00
Notes payable 858,000.00
Accrued Interest payable 20,000.00
Accrued Salaries expense 40,000.00
Unearned rent Income 18,000.00
1,416,000.00
 Unadjusted Balance
Goods in transit FOB Shipping point

8/1/2020 Unearned Subsciption Income

Balance

(2,000,000 *7/12)
1,400,000.00
80,000.00
1,480,000.00

2,000,000.00 12 166,666.67
833,333.33

1,166,666.67

1,166,666.67
Number of Coupons Available 640,000.00
Expected redemption 0.40
Expected coupons to be redeemed 256,000.00
Divided 2.00
Estimated premiums/tickets 128,000
Premiums redeemed already 125,000
(250,000/2)
Unredeemed Tickets 3,000
Cost of the ticket 15.00
Estimated Liability 45,000.00
 Beginning balance 120,000.00
Additional liability 180,000.00
(4000*3%*1500)
Warranty honoured during the year - 120,000.00

Remaining liability for warranty 180,000.00

Interest Expense
1/1/2020 Balance of the Notes Payable 9,000,000.00

### 900,000.00 9,900,000.00

### 990,000.00 10,890,000.00

### 1,089,000.00 11,979,000.00

2,979,000.00 11,979,000.00

(9,000,000*1.10*1.10*1.10) 11,979,000.00
 8% 10%
CV x effective rate) FA x nominal rate
Interest cash Premium
Date Interest Expense Collection Amorization Carrying Value
1/1/2020 3,405,000.00
### 272,400.00 300,000.00 27,600.00 3,377,400.00

10% 9%
Interest cash Discount
Date Interest Expense Collection Amorization Carrying Value
1/1/2020 4,695,000.00
### 469,500.00 450,000.00 19,500.00 4,714,500.00

0
 5000
4695
305

305,000.00
19,500.00
285,500.00
Accounts payable 115,000.00
Cash Dividend payable 30,000.00
Income tax payable 18,000.00
Accrued salaries payable 20,000.00
Customer's deposits 9,900.00
Provision for Warranty 5,200.00
Mortgage payable 2,000,000.00
2,198,100.00
a Working Capital = Current Assets - Current Liabilities
2,800,000.00 1,200,000.00

Working Capital = 1,600,000.00

b Current ratio = Current Assets

Current ratio = 2,800,000.00

Current ratio = 2.33

c Yes, the Company is liquid

d Debt to Total Asset ratio = Total Liabilities

Debt to Total Asset ratio = 3,000,000.00

Debt to Total Asset ratio = 0.35

Earnings before Interest

Times Interest earned = 5.6