Exercise 4-5 (Algorithmic)

Liquidity Ratios

The accounts and balances that follow are from Kellman, Inc.s general ledger.

Accounts Payable$ 13,280Accounts Receivable8,460Cash1,200Current Portion of Long-Term Debt8,000Long-Term Investments8,320Marketable Securities10,080Merchandise Inventory20,320Notes Payable (90 days)12,000Notes Payable (2 years)16,000Notes Receivable (90 days)20,800Notes Receivable (2 years)8,000Prepaid Insurance320Property, Plant, and Equipment48,000Property Taxes Payable1,000Income Taxes Payable1,580Common Stock15,200Retained Earnings5,860Salaries Payable680Supplies280Unearned Revenue600

Compute the (1) working capital and (2) current ratio. Round your current ratio value to two decimal places.

1.Working capital:$2.Current ratio:

Exercise 4-5 (Algorithmic) Liquidity Ratios The accounts and balances that follow are from Kellman, Inc.'s general ledger. Accounts Payable $ 13,280 Accounts Receivable 8,460 Cash 1,200 Current Portion of Long-Term Debt 8,000 Long-Term Investments 8,320 Marketable Securities 10,080 Merchandise Inventory 20,320 Notes Payable (90 days) 12,000 Notes Payable (2 years) 16,000 Notes Receivable (90 days) 20,800 Notes Receivable (2 years) 8,000 Prepaid Insurance Property, Plant, and Equipment Property Taxes Payable Income Taxes Payable Common Stock Retained Earnings 320 48,000 1,000 1,580 15,200 5,860 Salaries Payable 680 Supplies 280 Unearned Revenue 600 Compute the (1) working capital and (2) current ratio. Round your current ratio value to two decimal places. 1. Working capital: $ 2. Current ratio