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Assume that the current ratio for Arch Company 15 2.5, its acid-test ratio is 2.0, and its working capital is $300,000. Answer each of the
Assume that the current ratio for Arch Company 15 2.5, its acid-test ratio is 2.0, and its working capital is $300,000. Answer each of the following questlons independently, always referring to the orlginal Information. Required: a. How much does the firm have in current liabilitles? (Do not round intermediate calculations.) b. If the only current assets shown on the balance sheet for Arch Company are Cach, Accounts Recelvable, and Merchandise Inventory, how much does the firm have In Merchandise Inventory? (Do not round Intermediate calculations.) c. If the firm collects an account recelvable of $110,000, what will its new current ratlo and working capital be? (Round "Current ratlo" to 1 decimal place.) d. If the firm pays an account payable of $53,000, what will its new current ratlo and working capltal be? (Do not round Intermediate calculations. Round "Current ratio" to 1 decimal place.) e. If the firm sells inventory that was purchased for $50,000 at a cash price of $55,000, what will its new acid-test ratio be? (Do not round intermediate calculations. Round your answer to 1 decimal place.)
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