a) | ||
Current Ratio = Current Assets / Current Liabilities | ||
Acid Test Ratio = (Current Assets - Inventories - prepaid expenses)/ current liabilities | ||
the curent ratio converted in to acid test ratio | ||
from 5:1 to 1:1 only because of inventories and prepaid exepenses | ||
therefore we can say that inventories and prepaid expenses has weight of 4 i.e. 5-4 | ||
Therefore current asset would be =$497000/4*5 | ||
=$621250 | ||
And Current liabilities = $621250/5 | ||
=$124250 | ||
b) | Inventory Turnover Ratio = Cost of goods sold / average inventory | |
6 =Cost Of Goods Sold /$204000 | ||
Cost Of Goods Sold =$1224000 | ||
In the current year cost of goods sold is remained the same therefore | ||
average inventory would be | ||
=$1224000/8 | ||
=$153000 | ||
c) | ||
Current Ratio = Current Assets / Current Liabilities | ||
= $87000/43000 | ||
=2.02 times | ||
Acid Test Ratio = Quick Assets / Current Liabilities | ||
= $44000/43000 | ||
=1.02 times | ||
New Current Ratio = Current Assets / Current Liabilities | ||
= $101000/57000 | ||
=1.77 times | ||
New Acid Test Ratio = Quick Assets / Current Liabilities | ||
= $58000/57000 | ||
=1.02 times | ||
d) Current Ratio Before payment of Dividend | ||
Current Ratio = Current Assets / Current Liabilities | ||
= $616000/389000 | ||
=1.58 times | ||
Current Ratio = Current Assets / Current Liabilities | ||
= $448000/221000 | ||
=2.03 times |
Answer each of the questions in the following unrelated situations. (a) The current ratio of a...
Answer each of the questions in the following unrelated situations. (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 $531,000, what is the amount of current liabilities? Current Liabilities $ (b) A company had an average inventory last year of $180,000 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this...
Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $544,000, what is the amount of current liabilities? Current Liabilities (b) A company had an average inventory last year of $200,000 and its inventory turnover was 6. turnover is sales volume and unit cost remain the same this year as last and inventory this year, what will...
Brief Exercise 24-8 Answer each of the questions in the following unrelated situations. (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 $507,000, what is the amount of current liabilities? Current Liabilities $ (b) A company had an average inventory last year of $203,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover...
Brief Exercise 24-08 Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $511,000, what is the amount of current liabilities? Current Liabilities as (b) A company had an average inventory last year of $203,000 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover...
Brief Exercise 24-8 Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $481,000, what is the amount of current liabilities? Current Liabilities $ (b) A company had an average inventory last year of $185,000 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover...
prepare the following ratios for the current year. current ratio acid test ratio inventory turnover Days sales in average receivables. - Х Requirements Virginia's Crafts has provided the following data: (Click the icon to view the financial information.) Read the requirements Compute the following ratios for the current year for Virginia's Crafts: a. Current ratio b. Acid-test ratio c. Inventory turnover d. Days' sales in average receivables (assume all sales are on credit) a. Current ratio Enter the formula on...
More Info X Х a. Current ratio b. Cash ratio c. Acid-test ratio d. Inventory turnover e. Days' sales in inventory f. Days' sales in receivables g. Gross profit percentage Print Done und intermediary calculations to two decimal places X XX and round your final answer to a. Compute the current ratio for the current year. (Abbreviations used: STI = Short-term investments. Round your answer to two decimal places, X.XX.) Current ratio b. Compute the ca: 365 days / Accounts...
the financial statements of victors natural foods include the following items Compute the following ratios for the current year (Click the ioon to view the ratios.) The financial statements of Victor's Natural Foods include the following items: (Click the ioon to view the financial statements.) a. Compute the current ratio for the current year. (Abbreviations used: STI Short-term investments Round your answer to two decimal places, X.XX) Current ratio b. Compute the cash ratio for the current year. (Round your...
As loan analyst for Metlock Bank, you have been presented the following information. Toulouse Co. Lautrec Co. Assets Cash $119,000 $306,000 Receivables 217,000 289,000 Inventories 576,000 495,000 Total current assets 912,000 1,090,000 Other assets 489,000 616,000 Total assets $1,401,000 $1,706,000 Liabilities and Stockholders’ Equity Current liabilities $311,000 $332,000 Long-term liabilities 406,000 489,000 Capital stock and retained earnings 684,000 885,000 Total liabilities and stockholders’ equity $1,401,000 $1,706,000 Annual sales $883,000 $1,529,000 Rate of gross profit on sales 30 % 40 %...
Calculating the Current Ratio and the Quick (or Acid-Test) Ratio LoLo Lemon Company has current assets equal to $500,000. Of these, $300,000 is cash, $75,000 is accounts receivable, $125,000 is inventory, and the remainder is marketable securities. Current liabilities total $425,000. Required: Note: Round answers to two decimal places. 1. Calculate the current ratio. 2. Calculate the quick ratio (acid-test ratio).