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L04 Problem 2-5A Working Capital and Current Ratio The balance sheet of Kapinski Inc. includes the following items: Cash Accounts receivable Inventory Prepaid insurance Land
L04 Problem 2-5A Working Capital and Current Ratio The balance sheet of Kapinski Inc. includes the following items: Cash Accounts receivable Inventory Prepaid insurance Land $23,000 Accounts payable 43,000 Salaries payable 75,000 Capital stock 2,800 80,000 Retained earnings $84,900 3,200 100,000 35,700 Required 1. Determine the current ratio and working capital. 2. Kapinski appears to have a positive current ratio and a large net working capital. Why would it have trouble paying bills as they come due? 3. Suggest three things that Kapinski can do to help pay its bills on time
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