Question

Required information [The following information applies to the questions displayed below) Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2019, 2018, and 2017 2019 2018 2017 Sales $555,000 $340,000 $278,000 Cost of goods sold 283,500 212,500 153,900 Gross profit 271,500 127,500 124, 100 Selling expenses 102,900 46,920 50,000 Administrative expenses 50,668 29,920 22,800 Total expenses 153,568 76,840 73,600 Income before taxes 117,932 50,660 50,500 Income tax expense 40, 800 10,370 15,670 Net income $ 77,132 $ 40,290 $ 34,830 2017 KORBIN COMPANY Comparative Balance Sheets December 31, 2019, 2018, and 2017 2019 2018 Assets Current assets $ 52,390 $ 37,924 Long-term investments 0 500 Plant assets, net 100,000 96,000 Total assets $152,390 $134,424 Liabilities and Equity Current liabilities $ 22,800 $ 19,960 Common stock 72,000 72,000 Other paid-in capital 9,000 9,000 Retained earnings 48,590 33,464 Total liabilities and equity $152,390 $134,424 $ 51,748 3,950 60,000 $115,698 $ 20,300 60,000 6,000 29,398 $115,698 Required: 1. Complete the below table to calculate each year's current ratio. Current Ratio Choose Denominator: Choose Numerator: 1 1 Current ratio Current ratio G Prev 1 2 3 4 of 7 !!! Next >

Answer 1

Current Ratio= Current Assets/ Current Liabilities

For 2017:

Current Ratio= Current Assets of 2017/ Current Liabilities of 2017

=$51,748/$20,300

=2.55

For 2018:

Current Ratio= Current Assets of 2018/ Current Liabilities of 2018

=$37,924/19,960

=1.9

For 2019:

Current Ratio= Current Assets of 2019/ Current Liabilities of 2019

=$52,390/$22,800

=2.3