Question

QUESTIONS 16 to 21 Ace Company Balance Sheet at December 31, 2015 ASSETS Current Assets Cash Accounts Receivable 10,000 15,000 Raw Materials Inventory 50,000 40,000 Finished Goods Inventory Total Current Assets Long Term Assets Equipment Accumulated depreciation 150,000 100,000 500,000 250,000 Buildings Accumulated depreciation Land Total Long Term Assets TOTAL ASSETS 100,000 LIABILITIES AND OWNERS' EQUITY Current Liabilities Accounts Payable Income Taxes Payable in 6 months 10,000 2,000 80,000 Loan due in six (6) months Total Current Liabilities 350,000 Long Term Liabilities Loan due in two (2) years TOTAL LIABILITIES Common Stock: 20,000 shares @ $2 Retained Earnings Total Owners' Equity TOTAL LIABILITIES & OWNERS' EQUITY 40,000 33,000 Ace Company Income and Expense Statement January 1 to December 31, 2015 REVENUES Sales Cost of Goods Sold 350,000 200,000 Net sales 20,000 30,000 10,000 EXPENSES Operating Expenses Depreciation Expense Interest Expense Total Expenses PROFIT BEFORE TAXES Income Taxes @50% of Profit Before Taxes PROFIT AFTER TAXES

The answers to these questions are:

16: D) 1.25

17: B) 0.27

18: A) 0.14

Can someone please show how to get these answers?

Answer 1

16	Current ratio =	Current Assets/Current Liabilities
	=	115,000/92,000
	=	1.25
17	Acid test ratio =	(Current Assets - Inventory)/Current Liabilities
	=	(115,000 - 50,000 - 40,000)/92,000
	=	0.27
18	Equity ratio =	Total Shareholder Equity/Total Assets
	=	73,000/515,000
	=	0.14