Question

Exercise 8-25 (Part Level Submission) At December 31, 2016, Bridgeport Corporation reported current assets of $404,870 and current liabilities of $197,500. The following items may have been recorded incorrectly 1. Goods purchased costing $21,690 were shipped f.?.b. Shipping point by a supplier on December 28, Bridgeport received and recorded the invoice on December 29, 2016, but the goods were not included in Bridgeport's physical count of inventory because they were not received until January 4, 2017. 2. Goods purchased costing $14,050 were shipped f.o.b. destination by a supplier on December 26. Bridgeport received and recorded the invoice on December 31, but the goods were not included in Bridgeport's 2016 physical count of inventory because they were not received until January 2, 2017 3. Goods held on consignment from Claudia Kishi Company were included in Bridgeport's December 31, 2016, physical count of inventory at $14,100 4. Freight-in of $2,800 was debited to advertising expense on December 28, 2016 ? (a) Compute the current ratio based on Bridgeport's balance sheet. (Round ratio to 2 decimal places, e.g. 2.31:1.) The current ratio

Answer 1

a) Current Ratio based on Bridgeport's balance sheet = Current Assets/Current Liabilities

= $404,870/$197,500 = 2.05:1

Hence the current ratio based on Bridgeport's balance sheet is 2.05:1.