Sheridan Medical manufactures hospital beds and other institutional furniture. The companys comparative balance sheet and income statement for 2019 and 2020 follow.

Sheridan Medical Comparative Balance Sheet As of December 31
		2020		2019
Assets
Current assets
Cash		$391,000		$417,400
Accounts receivable, net		1,018,000		776,500
Inventory		720,000		681,050
Other current assets		381,350		247,050
Total current assets		2,510,350		2,122,000
Property, plant, & equipment, net		8,717,185		8,440,050
Total assets		$11,227,535		$10,562,050
Liabilities and Stockholders Equity
Current liabilities		$3,167,000		$2,846,100
Long-term debt		3,702,600		3,892,700
Total liabilities		6,869,600		6,738,800
Preferred stock, $5 par value		58,950		58,950
Common stock, $0.25 par value		104,650		103,900
Retained earnings		4,194,335		3,660,400
Total stockholders equity		4,357,935		3,823,250
Total liabilities and stockholders equity		$11,227,535		$10,562,050

Sheridan Medical Comparative Income Statement and Statement of Retained Earnings For the Year
		2020		2019
Sales revenue (all on account)		$10,177,250		$9,614,000
Cost of goods sold		5,612,650		5,298,700
Gross profit		4,564,600		4,315,300
Operating expenses		2,840,250		2,634,150
Net operating income		1,724,350		1,681,150
Interest expense		300,300		308,650
Net income before taxes		1,424,050		1,372,500
Income taxes (30%)		427,215		411,750
Net income		$996,835		$960,750
Dividends paid
Preferred dividends		29,450		29,550
Common dividends		433,450		413,100
Total dividends paid		462,900		442,650
Net income retained		533,935		518,100
Retained earnings, beginning of year		3,660,400		3,142,300
Retained earnings, end of year		$4,194,335		$3,660,400

(a-d)

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• Correct Answer

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Calculate the following liquidity ratios for 2020. (If working capital is negative then enter with a negative sign preceding the number or parentheses, e.g. -15,000 or (15,000). Round all answers except working capital to 2 decimal places, e.g. 2.55.)

a.	Working capital		$
b.	Current ratio
c.	Acid-test ratio
d.	Accounts receivable turnover			times

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Solution

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(e-f)

Calculate the following liquidity ratios for 2020. (Round average collection period to 0 decimal place, e.g. 25 and inventory turnover ratio to 2 decimal places, e.g. 5.12. Use 365 days for calculation.)

a.	Average collection period		days
b.	Inventory turnover		times