Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Apache Corporation reported the following items at December 31. 2021. and 2020: 5(Click the icon to view the comparative financial information.) Read the requirements. Requirement

image text in transcribed
Apache Corporation reported the following items at December 31. 2021. and 2020: 5(Click the icon to view the comparative financial information.) Read the requirements". Requirement 1. Compute the company's (a) quick (acid-test) ratio and (b) days' sales outstanding for 2021. Evaluate each ratio value as strong or weak. All sales are on account with terms of net 30 days. (a) Enter the formula and calculate the quick (acid-test) ratio for 2021. (Abbreviation used: Cash* = Cash and cash equivalents. Round your final answer to two decimal places.) (1) (2) Quick (acid-test) ratio Apache's quick (acid-test) ratio is c b) Select the formula and calculate Apache's days' sales outstanding for 2021. (Round interim calculations to two decimal places, XX.XX. Round the days' sales outstanding up to the next whole day.) (4 ) (5) = Days' sales outstanding Apache's days' sales outstanding (6). relative to credit terms of net 30 days. Requirement 2. Recommend two ways for Apache to speed up its cash flow from receivables. Apache could speed up cash flows from receivables by (7) or (8) 5: Data Table Balance Sheets (Summarized) Year End Year End 2021 2020 2021 2020 Current assets: Current liabilities: Cash 12.000 $ 8,000 Accounts payable $ 20,000 $ 21.500 Marketable securities 21.000 10,000 Other current liabilities 103,000 105.000 Accounts receivable, net 59.000 73,000 Long-term liabilities 20,000 21.000 Inventory 193.000 189,000 Other current assets 6.00 6,000 Stockholders' equity 148,000 148.500 Long-term assets 10,000 Total assets 291.000 $ 296,000 Total liabilities and equity 291.000 $ 296,000 Income Statement (partial): 2021 Sales revenue $ 990.000 6: Requirements Compute the company's (a) quick (acid-test) ratio and (b) days' sales outstanding for 2021. Evaluate each ratio value as strong or weak. All sales are on account with terms of net 30 days. Recommend two ways for Apache to speed up its cash flow from receivables. (1) O O Net current receivables + Short-term investments + Inventory (2) O O Inventories O Net sales revenue (3) O fairly weak. O Cash* + Net current receivables + Inventory O Accounts payable O Long-term assets O Other current liabilities O very strong. O Cash* + Other current assets + Equipment O Accounts receivable O Long-term liabilities O Total current assets O Cash* + Short-term investments + Net current receivables O Cash Net current receivables O Total current liabilities (4) O O Average net accounts receivable O Long-term assets O Other current liabilities (5) O O Average net accounts receivable O Long-term assets O Other current liabilities (6) O is within acceptable range O 365 days Cash O Long-term liabilities O Short-term investments O 365 days O Cash O Long-term liabilities O Short-term investments O is too high O Accounts payable O Cost of goods sold O Net sales revenue O Total current assets O Accounts payable O Cost of goods sold O Net sales revenue O Total current assets O Accounts receivable turnover O Inventories Other current assets O Total current liabilities O Accounts receivable turnover O Inventories Other current assets O Total current liabilities (7) O converting some accounts receivable to long-term note receivables (8) O decreasing penalties for late payments O discontinuing the use of credit cards increasing penalties for late payments Offering discounts for early payments O providing better customer support

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Management Accounting An Introduction

Authors: Pauline Weetman

8th Edition

1292244410, 978-1292244419

More Books

Students also viewed these Accounting questions

Question

Describe the movement of the open complex along the DNA.

Answered: 1 week ago

Question

8. What values do you want others to associate you with?

Answered: 1 week ago