Brief Exercise 24-08 Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $503,000, what is the amount of current liabilities? Current Liabilities $ (b) A company had an average inventory last year of $220,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? (Round answer to 0 decimal places, e.g. 125.) Average Inventory $ (c) A company has current assets of $90,000 (of which $36,000 is inventory and prepaid items) and current liabilities of $36,000. What is the current ratio? What is the acid-test ratio? If the company borrows $16,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, e.g. 2.50.) Current Ratio Acid Test Ratio New Current Ratio New Acid Test Ratio (d) A company has current assets of $589,000 and current liabilities of $263,000. The board of directors declare a cash dividend of $198,000. What is the current ratio after the declaration but before payment? What is the by & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Version 4.