The current ratio of a company is 5:1 and its acid-test ratio is 1:1
Answer each of the questions in the following unrelated situations.
Â
(a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $500,000, what is the amount of current liabilities?
(b) A company had an average inventory last year of $200,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year?
(c) A company has current assets of $90,000 (of which $40,000 is inventory and prepaid items) and current liabilities of $40,000. What is the current ratio? What is the acid-test ratio? If the company borrows $15,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be?
(d) A company has current assets of $600,000 and current liabilities of $240,000. The board of directors declares a cash dividend of $180,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend?
Â
Answers
Status NEW
Posted 11 Jun 2017 10:06 AM
My Price 7.00
-----------
Attachments
file 1497175520-Answer.docx preview (159 words )
A-----------nsw-----------er ----------- a.----------- Cu-----------rre-----------nt -----------rat-----------io -----------= C-----------urr-----------ent----------- as-----------set-----------s /----------- Cu-----------rre-----------nt -----------lia-----------bil-----------iti-----------es -----------5/1----------- = -----------CA -----------/ C-----------L C-----------A =----------- 5C-----------L A-----------cid----------- te-----------st -----------rat-----------io -----------= (-----------Cur-----------ren-----------t a-----------sse-----------ts ------------ I-----------nve-----------nto-----------rie-----------s) -----------/ C-----------urr-----------ent----------- li-----------abi-----------lit-----------ies----------- 1Â----------- = -----------(CA----------- - -----------$50-----------000-----------0) -----------/ C-----------L 1----------- = -----------(5C-----------L ------------ $5-----------000-----------00)----------- / -----------CL -----------CL -----------= 5-----------CL ------------ $-----------500-----------000----------- CL----------- = -----------$10-----------000-----------0 C-----------urr-----------ent----------- li-----------abi-----------lit-----------ies----------- =$-----------100-----------000----------- -----------b. -----------Fir-----------st -----------we -----------wil-----------l c-----------alc-----------ula-----------te -----------the----------- Sa-----------les----------- of----------- la-----------st -----------yea-----------r. -----------Inv-----------ent-----------ory----------- tu-----------rno-----------ver----------- = -----------Sal-----------es -----------/ A-----------ver-----------age----------- in-----------ven-----------tor-----------y 5----------- = -----------Sal-----------es -----------/ $-----------200-----------000----------- Sa-----------les----------- = -----------$10-----------000-----------00 -----------The----------- la-----------st -----------yea-----------r s-----------ale-----------s i-----------s
Not Rated(0)