For Sutton Manufacturing, determine the current ratio and the acid-test ratio. Are these values acceptable? Why or
Question:
For Sutton Manufacturing, determine the current ratio and the acid-test ratio. Are these values acceptable? Why or why not?
Sutton Manufacturing Balance Sheet Data (Thousands)
Assets Liabilities
Current assets Current liabilities
Cash $870 Notes payable $500
Account 450 Accounts payable 600
Receivable
Inventory 1200 Accruals 200
Prepaid expenses 50 Taxes payable 30
Other expenses 10 Current portion 100
Long-term debt -
Total current assets 2670 Total current 1430
Liabilities
Long-term debt 2000
Officer debt 200
Net fixed assets (subordinated) -
Land 1 200 Total liabilities 3630
Plant and 2800
Equipment
Common stock 1670
Notes receivable 200 Capital surplus 400
Intangibles 20 Retained earnings 1200
Other assets - 100 Total net worth 3-270
Total assets 6900 Total liabilities 6900
and net Worth
Balance SheetBalance 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...
Step by Step Answer:
a Current ratio current assets current liabilities 26...View the full answer
