Question

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 the first line, then calculate the ratio on the second line. (Round your answer to two decimal places, X.XX.) Current ratio } Print Done b. Acid-test ratio Enter the formula on the first line, then calculate the ratio on the second line. (Round your answer to two decimal places, X.XX. Abbreviation used: ST = short-term.) Acid-test ratio Financial information - X c. Inventory turnover Q Enter the formula on the first line, then calculate the turnover on the second line. (Round your answer to two decimal places, X.XX.) Balance sheet item: Inventory turnover Cash times Short-term investments Current Year Preceding Year S 14.500 $ 21.000 s 12.040 5 27.000 s 52.000 $ 64.100 $ 78.500 5 73,500 S 9.580 5 7.500 d. Days' sales in average receivables Enter the formula on the first line, then calculate the days' sales on the second line. Net receivables Inventory Prepaid expenses Total current assets Total current liabilities Days' sales in 3 average receivables 188,800 119.000 S 193.100 00.000 s days Income statement: Net Dredit sales Cost of goods sold $ 441.050 s 315.400 Print Done

Answer 1

a. Current Assets 166,600 Current Liabilities 119,000 Current ratio 1.40 $ $ b Cash + Short-term Investmensts + Net receivables )/Current Liabilities S 12,040 + $ 52,000 / $ 119,000 Acid-test ratio 0.66 $ 14,500 c. = Cost of goods Sold $ 315.400 Average Inventory $ 76,000 Inventory Turnover 4.15 times d. Average Receivables $ 58,050 Net Credit sales 441,650 Days' sales in average receivables 48 days $ Working Notes: Average Inventory = (Beginning Inventory + ending Inventory)/2 = ($73,500+$78,500) = $76,000 Average Receivables = (Opening Receivables + Ending receivables)/2 = ($64,100+$52,000)/2 = $58,050