Homework

Part $1$ of $6$

Comanche Carpets reported the following amounts in its $2024$ financial statements. The $2023$ figures are given for comparison.

$($Click the icon to view the comparative financial information.$)$

Read the requirements.

Requirement $1.$ Calculate Comanche's acid$-$test ratio for $2024.($Round to two decimals.$)$ Determine whether Comanche's acid$-$test ratio improved or deteriorated from $2023$ to $2024.$ How does Comanche's acid$-$test ratio compare with the industry average of $0\mathrm{.}80?($Abbreviations used: Cash $=$ Cash including cash equivalents; ST invest. $=$ short$-$term investments. Round the acid test ratio to two decimals, X$.$XX$.)$

Calculate the acid$-$test ratio for both years.

Data table

$\backslash$table$[[,2024,2023],[$Current Assets:$],[$Cash$,,$$$,2,000,$s$,8,000],[$Short$-$term Investments,,,$24,500,,13,500],[$Accounts Receivable,$$,59,000,$$$,72,000,],[$Less: Allowance for Bad Debts,,$(5,000),54,000,(4,000),68,000],[$Merchandise Inventory,,,$191,000,,187,000],[$Prepaid Insurance,,,$4,000,,4,000],[$Total Current Assets,,,$275,500,,280,500],[$Total Current Liabilities,,,$112,000,,114,000],[$Income statement$-$partial$],[$Net Sales $($all on account$),,,707,600,,728,000]]$