Question
Chum Lees accountant provides you with the following information taken from their most recent three years of financial statements. 2022 2021 2020 Current assets Cash
Chum Lees accountant provides you with the following information taken from their most recent three years of financial statements.
| 2022 | 2021 | 2020 | |||
| Current assets | |||||
| Cash | $26,505 | $28,500 | $30,000 | ||
| Accounts receivable | 83,504 | 68,446 | 60,040 | ||
| Inventory | 189,266 | 146,718 | 125,400 | ||
| Total Current Assets | $299,275 | $243,664 | $215,440 | ||
| Current liabilities | |||||
| Accounts payable | $91,000 | $89,000 | $86,000 | ||
| Salaries payable | 4,900 | 5,200 | 5,000 | ||
| Current portion of long-term debt | 24,000 | 36,000 | 36,000 | ||
| Total Current Liabilities | $119,900 | $130,200 | $127,000 | ||
| Other information: | |||||
| Credit sales in the year | $782,775 | $745,500 | $710,000 | ||
| Cost of goods sold | 469,665 | 447,300 | 426,000 |
Calculate the following ratios for 2022 and 2021 and select the correct answer.
| 2022 | 2021 | |
| Current Ratio | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 |
| Receivable Turnover Ratio | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 |
| Inventory Turnover Ratio | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 |
| Operating Cycle (days) | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 | 3.2912.420.5310.3035166131311.8711.602.803.572.503.2011111.441430.40 |
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Intermediate Accounting
Authors: Earl K. Stice, James D. Stice
18th edition
538479736, 978-1111534783, 1111534780, 978-0538479738
