Question
PRINCIPLES OF ACCOUNTING - ACCT-101 ASSIGNMENT- 3 Last Date for Submission November 19, 2016 Each Question carries one mark. Q1. What is the acid-test ratio?
PRINCIPLES OF ACCOUNTING - ACCT-101
ASSIGNMENT- 3
Last Date for Submission November 19, 2016
Each Question carries one mark.
Q1. What is the acid-test ratio? How does it measure a company's liquidity? Explain with Example.
Q2. The following information is available for the McCartney Corporation:
| Sales | $750,000 |
| Cost of goods sold | 450,000 |
| Gross profit | 300,000 |
| Operating income | 85,000 |
| Net income | 42,000 |
| Inventory, beginning-year | 71,200 |
| Inventory, end-of-year | 48,800 |
Calculate the company's inventory turnover and its days' sales in inventory.
Q3. A company made the following merchandise purchases and sales during the month of July:
| July 1 purchased | 380 | units at | $15 each |
| July 5 purchased | 270 | units at | $20 each |
| July 9 sold | 500 | units at | $55 each |
| July 14 purchased | 300 | units at | $24 each |
| July 20 sold | 250 | units at | $55 each |
| July 30 purchased | 250 | units at | $30 each |
There was no beginning inventory. If the company uses the first-in, first-out perpetual inventory method what would be the cost of the ending inventory?
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Accounting
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
9th edition
1118608224, 1118608227, 730323994, 9780730323990, 730319172, 9780730319177, 978-1118608227
