Items

(a) through

(d) are based on the following information:

SHARKEY CORPORATION Selected Financial Data As of December 31 2001 2000 Cash $ 8,000 $ 60,000 Marketable securities 32,000 8,000 Accounts receivable 40,000 110,000 Inventory 80,000 140,000 Net property, plant, and equipment 240,000 280,000 Accounts payable 60,000 100,000 Short-term notes payable 30,000 50,000 Cash sales 1,500,000 1,400,000 Credit sales 600,000 900,000 Cost of goods sold 1,260,000 1,403,000 Required Answer the following multiple-choice questions:

a. Sharkey’s acid test ratio as of December 31, 2001 is 1. 0.63 3. 0.89 2. 0.70 4. 0.99

b. Sharkey’s receivables turnover for 2001 is 1. 8 times 3. 12 times 2. 6 times 4. 14 times

c. Sharkey’s inventory turnover for 2001 is 1. 11.45 times 3. 9.85 times 2. 10.50 times 4. 8.45 times

d. Sharkey’s current ratio at December 31, 2001, is 1. 1.40 3. 1.90 2. 2.60 4. 1.78

e. If current assets exceed current liabilities, payments to creditors made on the last day of the year will 1. Decrease current ratio 3. Decrease working capital 2. Increase current ratio 4. Increase working capital