Question

Ques Lantana Products reported the following amounts in its 2010 francial statements. The 2018 amounts we given for comparison Cok the icon to view the financial data) Read the requirements. Requirement 1. Compute Lantana's quick acid-test) rato at the end of 2018. Round to two decimal places. How does the quick rano compare with the industry average of our Begin by selecting the formula, then enter the amounts and compute the quick (adio-test) ratio (Abreviation used Car Cash and cash equivalents. Round the quick acistest ratio to two decimal places) • Quick (acid-est ratio How does the quick (acitet ratio compare to the industry average of 0.927 Lantana's position is compared to the industry average of 0.02. Requirement 2. Compare de les outstanding for 2018 win the company's creator of net 30 days Begin by selecting the forma thenever the amounts to cate the day sales outstanding (Round in - Daye sales outstanding t o two decimal places, xx.xx and the day' standing (OS) to the next whole day) Lantara's days' ses outstanding is the credit terms of net 30. Choose from any list or ente

Answer 1

Required 1 : Compute the Lantana's Quick (Acid Test) Ratio for 2019 :
Cash +Short term investments + Net current receivables	/	Total Current liabilities	=	Quick (Acid Test )ratio
$ 9500 + $ 10,500 +$ 79,000	/	$ 99,000	=	Quick (Acid Test )ratio
$ 99,000	/	$ 99,000	=	1
Lantana's position is Favorable    compare Required 2 : Compute the Day's sales outstanding for 2019 : 365 Days / Accounts receivable turnover = Day's sales outstanding 365 Days / $ 9 (see note 1 ) = 41 Days   Lantana's day's sales outstanding is Worse than the credit terms of net 30 Explanation : Note 1 : Accounts receivable Turnover = Net sales / Average Accounts receivable Average accounts receivable = (Beginning Net accounts receivable + Ending Net accounts receivable) / 2 Average accounts receivable = ($ 64,600 + $ 79,000 ) / 2 Average accounts receivable = $ 71,800 Accounts receivable Turnover = Net sales / Average Accounts receivable Accounts receivable Turnover = $ 646,200 / $ 71,800 Accounts receivable Turnover = $ 9 to the industry average of 0.92