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8A. a) Working Capital Working Capital = Current assets - Current Liability Working Capital= 500,000 - 210,000 Working Capital = $290,000 b) Current Ratio Current
8A. a) Working Capital Working Capital = Current assets - Current Liability Working Capital= 500,000 - 210,000 Working Capital = $290,000 b) Current Ratio Current Assets = Cash + Accounts Receivable + Inventory + prepaid Expenses Current Assets= 30 + 210 + 190 + 70 = 500 Current Liabilities = Accounts payable + Accrued liabilities + Notes Payable, Short te Current Liabilities = 140 + 30 + 40 = 210 Current Ratio= Current Assets/Current liability Current Ratio = 500/210 = 2.38 c) Acid Test Ratio Quick Assets = Cash + Accounts Receivable + Prepaid Expenses Quick Assets= 30 + 210 + 70 = 310 Acid Test Ratio = Quick Assets / Current liabilities Acid Test Ratio = 310/210 = 1.47
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