Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please solve all and show work. PPC Ltd. signed a five-year term loan in 2020 in which PPC was required to maintain a current ratio

please solve all and show work. image text in transcribed
image text in transcribed
PPC Ltd. signed a five-year term loan in 2020 in which PPC was required to maintain a current ratio of 2.5 times for a loan covenant PPC provides normal credit terms of net 30 on all its sales. The following amounts were reported in the company's year end financial statements for 2020 and 2019: Cash Accounts receivable Short-term investments Inventory Prepaid rent Accounts payable Wages payable Income tax payable Sales tax payable Notes payable (within 1 yr.) Bank loan payable Sales revenue 2020 $188.900 178,700 10,100 424,300 75,000 178.200 32,600 50,100 14.900 12,100 59,800 1,903,600 2019 $278.900 89,300 2.100 403,400 75,000 193,800 55,400 60,500 14.900 24. 200 0 1,664,500 Additional information The bank loan payable is repayable in annual principal payments of $11.960. Calculate the current ratio for 2019 and 2020. (Round answers to 2 decimal places, og 15.25) 2020 2019 Current ratio e Textbook and Media Calculate the quick ratio for 2019 and 2020. (Round answers to 2 decimal places, es 15.25.) 2020 2019 Quick ratio Calculate the accounts receivable turnover ratio for 2019 and 2020 (just use the current year's Accounts Receivable balance), (Round answers to 1 decimal place, eg. 15.2) 2020 2019 Accounts receivable turnover ratio times times eTextbook and Media Is PPC compliant with the current ratio covenant? e Textbook and Media How does PPC's average collection period compare to its normal credit terms? (Round answers to 1 decimal place, . 15.2. Use 365 days for calculation) 2020 2019 Average collection period days days The average collection period is PPC's normal credit terms

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

Step: 3

blur-text-image

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

Accounting Principles

Authors: Jerry J. Weygandt, Valerie A. Kinnear, Donald E. Kieso, Paul D. Kimmel, Barbara A. Trenholm, Joan E. Barlow

6th Canadian Edition

1118557301, 978-1118557303

More Books

Students also viewed these Accounting questions

Question

What does this key public know about this issue?

Answered: 1 week ago

Question

What is the nature and type of each key public?

Answered: 1 week ago

Question

What does this public need on this issue?

Answered: 1 week ago