Sprague Company has been operating for several years, and on December 31, 2025, presented the following balance

Question:

Sprague Company has been operating for several years, and on December 31, 2025, presented the following balance sheet.

The net income for 2025 was $25,000. Assume that total assets are the same in 2024 and 2025.

Instructions

Compute each of the following ratios. For each of the four, indicate the manner in which it is computed and its significance as a tool in the analysis of the financial soundness of the company (round answers to two decimal points).

a. Current ratio.

b. Acid-test ratio.

c. Debt to assets ratio.

d. Return on assets.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

See More Books

Question Posted: Jun 27, 2023 06:20 AM

See More Questions

Sprague Company has been operating for several years, and on December 31, 2008, presented the following balance sheet. The net income for 2008 was $25,000. Assume that total assets are the same in...
Ratio Computations and Discussion Costner Company has been operating for several years, and on December 31, 2010, presented the following balance sheet. The net income for 2010 was $25,000. Assume...
Sprague Company has been operating for several years, and on December 31, 2020, presented the following balance sheet. The net income for 2020 was $25,000. Assume that total assets are the same in...
You have just completed your four-year degree at LLC University! Your student loans that you have accumulated while studying at LLC total $25,000. Since you have graduated, you must now begin...
Edward Papa, a lawyer, was paid $42,000 on October 1 to represent a client in real estate negotiations over the next 12 months. 1. Record the journal entries required in Papas records on October 1...
Best Buy would like to investigate the linear relationship between the selling price of a Canon PowerShot digital camera and the demand for it. The following table shows the weekly demand for the...
A company issued 5-year, 5% bonds with a par value of $100,000. The company received $95,735 for the bonds. Using the straight-line method, the companys interest expense for the first semiannual...
The following transactions were selected from among those completed by Hailey Retailers in 2014: Nov. 20 Sold two items of merchandise to Baja, who charged the $ 450 sales amount on her Visa credit...
Coronado Industries has fixed costs of $550000 and variable costs are 60% of sales. How much will Coronado report as sales when its net income equals $56000? $1431000 O $1515000 $363600 $1010000...
A work sheet for Juanita's Consulting is shown on the following page. There were no additional investments made by the owner during the month. REQUIRED 1. Prepare an income statement. 2. Prepare a...
Wallace Computer Company is a small, closely held corporation. Eighty percent of the stock is held by Derek Wallace, president. Of the remainder, 10% is held by members of his family and 10% by Kathy...
On December 31, 2025, McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2026. On January 21, 2026, the company issued 25,000 shares of its common stock...
NOW Inc. released its annual results and finance! statements. Grace is reeding the summary In the bullion CO today's paper. In its annual report this year, NOW Inc. reported a net income of $152...
The Role of Leadership in Shaping Organizational Culture Recent research stated that [c]ompanies with an established organizational culture that includes strong capabilities for change, commitment to...
Unscheduled absences by clerical and production workers are an important cost in many companies. Reducing the rate of absenteeism is, therefore, an important goal for a company's human relations...
Many of the largest tech firms, including Google, Apple, Amazon, and Microsoft, have spent hundreds of millions of dollars to improve their information technology infrastructure. Now, these companies...
In the business sense, a product refers to a commodity available for purchase, encompassing both services and tangible or intangible items. It may exist in physical, virtual, or cyber forms. Every...
Data Exploration and Multiple Linear Regression (MLR) using SAS. The "College" data set contains the statistics for many US Colleges from 1995 issue of US News and World Report. It has 777...
Kayak has become a publicly traded company in July 2012. This exercise asks you to forecast its free cash flow and discuss risks the company was facing right after the IPO (please ignore its later...
What are technical skills At what level are they most important and why?
Callaghan Inc. decided to sell shares to raise additional capital so that it could expand into the rapidly growing service industry. The corporation chose to sell these shares through a subscription...
Kunzig Corporation is authorized to issue 500,000 common shares. During 2012, the company took part in the following selected transactions. 1. Issued 6,000 common shares at $30 per share, less $2,000...
Radford Corporations charter authorized 1 million shares of $11 par value common shares, and 300,000 shares of 6% cumulative and non-participating preferred shares, with a par value of $100 per...
nformation pertaining to Noskey Corporation s sales revenue follows: November 2 0 2 1 ( Actual ) December 2 0 2 1 ( Budgeted ) January 2 0 2 2 ( Budgeted ) Cash sales $ 1 0 5 , 0 0 0 $ 1 1 5 , 0 0 0...
The management team of Netflix maintains a stable dividend using the Lintner model: Dt+1 = Dt + EPS Target Payout Where Dt (Dt+1) = dividend in the current period t (the next period t + 1) EPSt =...
#1 #2 hapter 50 10 D Werences lav Help Required information [The following information applies to the questions displayed below) Archer Company is a wholesaler of custom-built air-conditioning units...

Sprague Company has been operating for several years, and on December 31, 2025, presented the following balance

Question:

Cash Receivables Inventory Plant assets (net) Sprague Company Balance Sheet December 31, 2025 $ 40,000 75,000 95,000 220,000 $430,000 Accounts payable Mortgage payable Common stock ($1 par) Retained earnings $80,000 140,000 150,000 60,000 $430,000

Step by Step Answer:

Li a b c Current Ratio Current Assets Current Liabilities Acidtest ratio 40000 75000 95000 Curre...View the full answer

Intermediate Accounting

Students also viewed these Business questions