Quick ratio, current ratio, and accounts receivable turnover (Learning Objective 7) 15–20 min.

Midwest Equipment reported the following items on July 31, 2014 (amounts in thousands, with last year’s amounts also given as needed):

$ 360 130 145 130 3,270 360 30 Accounts Payable........................

Cash............................................

Inventory:

July 31, 2014 .........................

July 31, 2013 .........................

Net Credit Sales ..........................

Long-term Assets .......................

Long-term Liabilities ...................

280 260 1,160 95 65 25 Accounts Receivable, Net:

July 31, 2014 ..............................

July 31, 2013 ..............................

Cost of Goods Sold ..........................

Short-term Investments...................

Other Current Assets........................

Other Current Liabilities ...................

Requirements 1. Compute Midwest Equipment’s

(a) quick ratio,

(b) current ratio, and

(c) accounts receivable turnover for 2014.
2. Evaluate each ratio value as strong or weak. Assume Midwest Equipment sells on terms of net 30.AppendixLO1