Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Following is a comparative balance sheet for Astra Corporation: Astra Corporation Comparative Balance Sheet December 31, 2020 and 2019 2020 2019 Current assets: Cash $

Following is a comparative balance sheet for Astra Corporation:

Astra Corporation

Comparative Balance Sheet

December 31, 2020 and 2019

2020 2019

Current assets:

Cash $ 140,000 $ 90,000

Short-term investments 90,000 80,000

Accounts receivable, net 350,000 220,000

Inventory 500,000 430,000

Prepaid expenses 30,000 30,000

Total current assets $1,110,000 $ 850,000

Property, plant, and equipment, net 750,000 500,000

Other assets 280,000 300,000

Total assets $2,140,000 $1,650,000

Current liabilities:

Short-term notes payable $650,000 $670,000

Accounts payable 200,000 225,000

Total current liabilities $850,000 $895,000

Non-current debt 380,000 220,000

Total liabilities $1,230,000 $1,115,000

Shareholders' equity:

Common shares $500,000 $500,000

Retained earnings 410,000 35,000

Total shareholders' equity $ 910,000 $535,000

Total liabilities and shareholders' equity $2,140,000 $1,650,000

Notes: Net sales (all on credit) and cost of goods sold for the year ended December 31, 2020, were $2,000,000 and $1,200,000, respectively. The number of common shares outstanding has been 50,000 since the company began operations.

Required:

Calculate the following ratios for the year ended December 31, 2020 (show all formulas)

a. current ratio

b. acid-test ratio

c. inventory turnover

d. accounts receivable turnover

e. debt ratio

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

Forensic And Investigative Accounting

Authors: D. Larry Crumbley, Lester E. Heitger, G. Stevenson Smith

6th Edition

0808034871, 9780808034872

More Books

Students also viewed these Accounting questions

Question

=+1. Who is responsible for CSRfirms or their stakeholders? Why?

Answered: 1 week ago