Question

ACCT 102, Winter 2018-2019 uiz: CHAPT 15 (Quiz) 4 of 6 (2 co his Question: 1 pt The financial statements 囲(click the icon to ve O Financal Statements nswer to tw a. Compute the current a Current ratio = L b. Compute the cash ratic cash ratio =[ Current Year Preceding Year Balance Sheet: s 17,000$ 27,000 22,000 82,000 64,000 8,000 203,000 Cash | 15,000 62,000 74,000 11,000 179.000 Short-term Investments Compute theacid-testNet Accounts Merchandise Inventory Acid-test ratio Prepaid Expenses d. Compute the inventory Total Current Assets Inventory turnover e. Compute the days' sale 132,000 82,000 [ コtime Total Current Liabilities Income Statement Net Credit Sales Cost of Goods Sold 463,000 X.XX and roun 310.000 Days' sales in inventory . Compute the days sale Days sales in receivable g. Compute the gross profit percentage for the current year (Round your answer to one tenth of a percent. XX%.) Gross profe percentage Choose from any list or enter any number in the input felds and then continue to the next question. days es, X.XX and rou Print Done days

Answer 1

Answer a.

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $179,000 / $132,000
Current Ratio = 1.36

Answer b.

Cash Ratio = Cash / Current Liabilities
Cash Ratio = $17,000 / $132,000
Cash Ratio = 0.13

Answer c.

Acid-test Ratio = (Cash + Short-term Investments + Net Accounts Receivable) / Current Liabilities
Acid-test Ratio = ($17,000 + $15,000 + $62,000) / $132,000
Acid-test Ratio = 0.71

Answer d.

Average Inventory = ($74,000 + $64,000) / 2
Average Inventory = $69,000

Inventory Turnover = Cost of Goods Sold / Average Inventory
Inventory Turnover = $310,000 / $69,000
Inventory Turnover = 4.49 times

Answer e.

Days’ Sales in Inventory = 365 / Inventory Turnover
Days’ Sales in Inventory = 365 / 4.49
Days’ Sales in Inventory = 81.29 days

Answer f.

Average Accounts Receivables = ($62,000 + $82,000) / 2
Average Accounts Receivables = $72,000

Days’ Sales in Receivable = 365 * Average Accounts Receivables / Net Credit Sales
Days’ Sales in Receivable = 365 * $72,000 / $463,000
Days’ Sales in Receivable = 56.76 days

Answer g.

Gross Profit Percentage = (Net Credit Sales - Cost of Goods Sold) / Net Credit Sales
Gross Profit Percentage = ($463,000 - $310,000) / $463,000
Gross Profit Percentage = 0.3305 or 33.05%