Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Award: 4.29 out of 6.00 points Assume that the current ratio for Arch Company is 3.0, its acid-test ratio is 2.0, and its working capital

image text in transcribed

Award: 4.29 out of 6.00 points Assume that the current ratio for Arch Company is 3.0, its acid-test ratio is 2.0, and its working capital is $300,000. Answer each of the following questions independently, always referring to the original information. Required a. How much does the firm have in current liabilities? (Do not round intermediate calculations.) ren bilities 150,000 b. If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory? (Do not round intermediate calculations.) 150,000 c. If the firm collects an account receivable of $112,000, what will its new current ratio and working capital be? (Round "Current ratio" to 1 decimal place.) Current ratio 3.0 Working capital d. If the firm pays an account payable of $57,000, what will its new current ratio and working capital be? (Do not round intermediate calculations. Round "Current ratio" to 1 decimal place.) Current ratio Working capital 4.2 e. If the firm sells inventory that was purchased for $50,000 at a cash price of $56,000, what will its new acid-test ratio be? (Do not round intermediate calculations. Round your answer to 1 decimal place.) 2.3 es

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_2

Step: 3

blur-text-image_3

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

Auditing Practices A Complete Guide

Authors: Gerardus Blokdyk

2023rd Edition

1038804450, 978-1038804457

More Books

Students also viewed these Accounting questions