Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 3 Gala Inc. incurred a netloss of $20,000 for 2020 The balance sheet at December 31, 2020, For Gala, Inc., includes the following terms

image text in transcribed
QUESTION 3 Gala Inc. incurred a netloss of $20,000 for 2020 The balance sheet at December 31, 2020, For Gala, Inc., includes the following terms in random order Accountries Amounts Land $21,000 bund 180.000 Notes payable (due in three years) 80,000 Retained ang 25.000 Accounts payable 75.000 43 000 Marketable securities 20.000 Capital stoc 300,000 Salnes payable 12.000 Prepaid insurance 9,000 Inventory 55.000 Accounts receivable 33.000 Indicate which of the following best describes Gal's debt paying ability Gala Ines quick and entrato (relative measurement of solvency) of 57 and 96 to 1 sest shut it has a fair ability to pay debts as they come diven the curtain is less than the rule of thebrood ratio of 2 to 1 Gala has a negative working capital (absolute measurement of solvency) Gain Ines quick and contrato (relative measurement of solvency) of 6 and 11 to 1 suitests that it has a fair ability to pay debts as they come due, mentor current ratio is less than the rule of the good ratio of 2 to 1 Gala has a negative working capital (absolute measurement of solvency) Gain Ine's quick and antrent ratio relative measurement of solvency) of 1.9 and 1601 gests that it has a four ability to pay debts as they come duen the current raises the rule of thumb wood rano of 210 1 Gala han a poutre working capital huolute measurement of solvey) Gala Inc quick and current ratio (relative meastment of solvency) of 1.1 and 18 to let that it has a fair ability to pay debts they come due given the current ratio in less tha the role of thumb good ratio of 2 to 1 Gala has a positive working capital absolute meat of soiency)

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_2

Step: 3

blur-text-image_3

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 Weygandt, Paul Kimmel, Donald Kieso

12th edition

1119132223, 978-1-119-0944, 1118875052, 978-1119132226, 978-1118875056

More Books

Students also viewed these Accounting questions