Grouper Company provides you with the following balance sheet information as of December 31, 2020. In addition,

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Grouper Company provides you with the following balance sheet information as of December 31, 2020.

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In addition, Grouper reported net income for 2020 of $16,000, income tax expense of $3,200, and interest expense of $1,300.

a. Compute the current ratio and working capital for Grouper for 2020.

b. Assume that at the end of 2020, Grouper used $3,000 cash to pay off $3,000 of accounts payable. How would the current ratio and working capital have changed?

c. Compute the debt to assets ratio and the times interest earned ratio for Grouper for 2020.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Financial and Managerial Accounting

ISBN: 978-1119392132

3rd edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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