Question
6. Use the balance sheets of Sando shown below to calculate the following ratios for 2012 (round to the hundredths): (a) 5pts Current ratio. (b)
6. Use the balance sheets of Sando shown below to calculate the following ratios for 2012 (round to the hundredths):
(a) 5pts Current ratio.
(b) 5pts Acid-test ratio.
(c) 5pts Debt ratio.
| Sando Company Balance Sheets December 31, 2011 and 2012 | ||
| 2011 | 2012 | |
| Assets: | ||
| Cash............................................................ | $ 43,000 | $ 22,000 |
| Accounts receivable.................................... | 38,000 | 42,000 |
| Merchandise inventory............................... | 61,000 | 52,000 |
| Prepaid insurance........................................ | 6,000 | 9,000 |
| Long-term investments................................ | 49,000 | 20,000 |
| Plant assets (net)......................................... | 218,000 | 218,000 |
| Total assets................................................. | $415,000 | $363,000 |
| Liabilities and Equity: | ||
| Current liabilities......................................... | $ 62,000 | $ 75,000 |
(Points : 15)
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