Question
Oppong Corporation had the following balances: Account20142013Cash$58,500$58,000Accounts receivable82,500131,500Long-term investment in shares147,00095,000Land improvements58,50069,000Accounts payable31,50065,500Salaries payable113,50054,500Short-term notes payable40,50067,000Unearned rent37,50041,000Long-term notes payable75,50063,500Rent earned67,00093,000Interest earned23,00011,500Rent expense, selling space42,00042,500 a)
Oppong Corporation had the following balances:
Account20142013Cash$58,500$58,000Accounts receivable82,500131,500Long-term investment in shares147,00095,000Land improvements58,50069,000Accounts payable31,50065,500Salaries payable113,50054,500Short-term notes payable40,50067,000Unearned rent37,50041,000Long-term notes payable75,50063,500Rent earned67,00093,000Interest earned23,00011,500Rent expense, selling space42,00042,500
a) Calculate the working capital for 2014 and 2013. Please make sure your final answer(s) are accurate to the nearest whole number.
20142013Working capital
b) Is the change in working capital favourable or unfavourable?
The change in working capital is(select one).
c) Calculate the current ratio for 2014 and 2013. Please make sure your final answer(s) are accurate to 2 decimal places.
20142013Current ratio
d) Is the change in current ratio favourable or unfavourable?
The change in current ratio is(select one).
e) For the next two questions, assume that on the last day of 2014, the entire $31,500 balance in Accounts payable was paid off by cash. How would the working capital have changed?
The working capital would have(select one).
f) How would the current ratio have changed?
The current ratio would have
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