Question

1/Bronco Electronics' current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data...

1/Bronco Electronics' current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement:

Inventories $ 155,000
Total assets $ 1,430,000
Current ratio 3.3
Acid-test ratio 2.30
Debt to equity ratio 1.6


Required:
Compute the long-term assets for Bronco:

Long-term assets

2/ Bronco Electronics' current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement:

Inventories $ 170,000
Total assets $ 1,520,000
Current ratio 3.7
Acid-test ratio 2.45
Debt to equity ratio 1.5


Required:
Compute the long-term liabilities for Bronco:

Long-term liabilities

3/ Spartan Sportswear's current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data were abstracted from a recent financial statement:

Inventories $ 170,000
Total assets $ 845,000
Current ratio 3.40
Acid-test ratio 1.70
Debt to equity ratio 1.60


Required:
Compute the long-term liabilities for Spartan:

Long-term liabilities
0 0
Add a comment Improve this question Transcribed image text
Answer #1
Answer
1 Long term assets for Bronco 965000
2 Long term liabilities for Bronco 776000
3 Long term liabilities for Spartan 350000
1 long term assets = Total assets - Current assets
computation of current asset
current ratio is 3.3 (given)
current assets/current liabilities = 3.3
therefore, current assets = 3.3 current liabilities
acid test ratio is 2.3 (given)
quick assets/current liabilties = 2.3
therefore, quick assets = 2.3 current liabilities
quick assets = current assets - inventory
2.3 current liabilities= 3.3 current liabilities - 155000
(3.3 - 2.3) current liabilities = 155000
current liabilities = 155000
therefore current asset = 3.3 current liabilities
that is, 3.3 * 155000 = 465000
therefore long term asset = 1430000-465000 = 965000
2 long term liabilities = Total debt - Current liability
a) computation of total debt
total debt + total equity = total assets = 152000(given)
debt equity ratio is 1.5 (given)
debt/equity = 1.5
therefore, total debt = 1.5 equity
1.5 equity + 1 equity = 1520000
2.5 equity = 1520000
equity = 1520000/2.5 = 608000
therefore, total debt = 1.5 equity
that is 1.5 * 608000 = 912000
b) computation of current liability
current ratio is 3.7 (given)
current assets/current liabilities = 3.7
therefore, current assets = 3.7 current liabilities
acid test ratio is 2.45 (given)
quick assets/current liabilties = 2.45
therefore, quick assets = 2.45 current liabilities
quick assets = current assets - inventory
2.45 current liabilities= 3.7 current liabilities - 170000
(3.7 - 2.45) current liabilities = 170000
1.25 current liabilities = 170000
therefore, current liabilities = 170000/1.25 = 136000
therefore long term liabilties = 912000-136000 = 776000
3 long term liabilities = Total debt - Current liability
a) computation of total debt
total debt + total equity = total assets = 845000(given)
debt equity ratio is 1.6 (given)
debt/equity = 1.6
therefore, total debt = 1.6 equity
1.6 equity + 1 equity = 1520000 845000
2.6 equity = 845000
equity = 845000/2.6 = 325000
therefore, total debt = 1.6 equity
that is 1.6 * 325000 = 520000
b) computation of current liability
current ratio is 3.4 (given)
current assets/current liabilities = 3.4
therefore, current assets = 3.4 current liabilities
acid test ratio is 1.7 (given)
quick assets/current liabilties = 1.7
therefore, quick assets = 1.7 current liabilities
quick assets = current assets - inventory
1.7 current liabilities= 3.4 current liabilities - 170000
(3.4 - 1.7) current liabilities = 170000
1.7 current liabilities = 170000
therefore, current liabilities = 170000/1.7 = 100000
therefore long term liabilties = 520000-170000 = 350000
Add a comment
Know the answer?
Add Answer to:
1/Bronco Electronics' current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT