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Five individuals organized Miami Music Corporation on January 1. At the end of January 31, the following monthly financial data are available:
Total Revenues $ 133,000
Operating Expenses 90,700
Cash 31,800
Accounts Receivable 25,500
Supplies 41,100
Accounts Payable 24,500
Common Stock 31,600
No dividends were declared or paid during January.
a. Does Miami Music Corporation have sufficient resources to pay its liabilities?
Yes
No
b. Which financial statement indicates this?
i. Income Statement
ii. Statement of Retained Earnings
iii. Balance Sheet
iv. Statement of Cash Flows

Respuesta :

jepessoa

Answer:

a. Does Miami Music Corporation have sufficient resources to pay its liabilities?

  • Yes

b. Which financial statement indicates this?

  • iii. Balance Sheet

The balance sheet shows that total accounts payable are $24,500. The company's liquid assets are much higher, especially cash which is $31,800. The company should have enough resources to pay all its liabilities. it is also a profitable company.

Explanation:

Parrain

Based on the entries in the books of this company, the following are true:

  • a. Yes they do.
  • b. Balance Sheet.

How do we know the company can pay off its debt?

Paying off liabilities requires current assets to be larger than liabilities.

The current assets of Account Receivable ($25,500) and Cash ($31,800) are both larger than the Accounts Payable of $24,500. The company can therefore pay off liabilities.

All three accounts are found in the Balance Sheet.

Find out more on the Balance Sheet at https://brainly.com/question/25225110.

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