Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PROBLEM SOLVING Answer the following items using the financial statements below. Encircle the letter of the correct answer. Show your computations. (8 items x 5

image text in transcribed
PROBLEM SOLVING Answer the following items using the financial statements below. Encircle the letter of the correct answer. Show your computations. (8 items x 5 points) ABC Corporation Comparative Statement of Financial Position For the Years Ended 2018 and 201A (in pesos) 201B 201A Cash and Cash Equivalents 2,450 2,094 Receivables 1,813 1,611 Inventories 1,324 1,060 Prepaid Expenses 1,709 2.120 Total Current Assets 7.296 6885 Noncurrent Assets 18,500 15,737 Total Assets 25,796 22.622 Current Liabilities 7.230 8,467 Long-Term Liabilities 4,798 3,792 Common Stock 6.568 4.363 Retained Earnings 7.200 6.000 Total Liabilities and Equity 25,796 22.622 ABC Corporation Income Statement For the Year Ended 2018 (in pesos) 201B Sales 20,941 Less: Cost of Goods Sold 7,055 Gross Profit 13,886 Less: Operating expenses 7,065 Income from operations 6,821 Less: Interest expense 210 Income before taxes 6,611 Less: Income tax 2,563 Net Income 4,048 1. Which statement best describes ABC's acid-test ratio for 2018? a. Greater than 1 C. Less than 1 b. Equal to 1 d. None of the above 2. Inventory turnover (amount rounded)? a. Six (6) times C. Eight (8) times b. Seven (7) times d. Cannot be determined 3. Days' sales in receivables (amounts rounded)? a. 28 days C. 32 days b. 30 days d. 34 days 4. Times-interest-earned ratio? a. 54.7% C. 32 times b. 19 times d. 34 times

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, The Financial Chapters

Authors: Tracie Miller Nobles

12th Edition

013449041X, 9780134490410

More Books

Students also viewed these Accounting questions