Linden Company provided the following information: Current assets ...... $ 6,930 Current liabilities ..... 6,413 Liquid assets
Question:
Linden Company provided the following information:
Current assets ...... $ 6,930
Current liabilities ..... 6,413
Liquid assets ............ 2,001
Total assets ............ 25,327
Total liabilities... ..... 13,453
Required:
A. Calculate the current and quick ratios.
B. Assume that management misclassified some of its investments as trading securities when in fact these securities should have been classified as held- to- maturity securities. Therefore, the liquid assets should be only $ 920. What is the impact on the current and quick ratios?
C. Why is investment classification important for external financial statement users?
MaturityMaturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Step by Step Answer:
A Current ratio 69306413 10806 Quick ratio 20016413 0312 B Error 20...View the full answer
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Related Book For 
Introduction to Accounting An Integrated Approach
ISBN: 978-0078136603
6th edition
Authors: Penne Ainsworth, Dan Deines
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