Question
PROBLEM #2- Based on the financial information below AND considering beginning of the year balances for Accounts receivable and Inventory were $35,000 and $50,000,
PROBLEM #2- Based on the financial information below AND considering beginning of the year balances for Accounts receivable and Inventory were $35,000 and $50,000, respectively, calculate the following: 1. Current ratio 2. Working capital 3. Debt to Equity ratio 4. Times interest earned 5. Average collection period (use 365 days in a year) 6. Operating cycle period (use 365 days in a year) Baker Enterprises-Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory $16,000 35,000 90,000 4,000 Prepaid expenses Total current assets 145,000 Property and equipment, net 175,000 Total assets $320,000
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