Question
The balance sheets for Monitor World Corporation and additional information are provided below. MONITOR WORLD CORPORATION Balance Sheets December 31, 2024 and 2023 2024 2023
The balance sheets for Monitor World Corporation and additional information are provided below.
| MONITOR WORLD CORPORATION | ||
| Balance Sheets | ||
| December 31, 2024 and 2023 | ||
| 2024 | 2023 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash | $137,200 | $118,000 |
| Accounts receivable | 74,000 | 90,000 |
| Inventory | 93,000 | 78,000 |
| Investments | 3,800 | 1,800 |
| Long-term assets: | ||
| Land | 460,000 | 460,000 |
| Equipment | 770,000 | 650,000 |
| Less: Accumulated depreciation | (408,000) | (248,000) |
| Total assets | $1,130,000 | $1,149,800 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $97,000 | $83,000 |
| Interest payable | 5,500 | 11,800 |
| Income tax payable | 7,500 | 4,800 |
| Long-term liabilities: | ||
| Notes payable | 100,000 | 200,000 |
| Stockholders' equity: | ||
| Common stock | 680,000 | 680,000 |
| Retained earnings | 240,000 | 170,200 |
| Total liabilities and stockholders' equity | $1,130,000 | $1,149,800 |
Additional information for 2024:
Net income is $69,800.
Sales on account are $1,451,400.
Cost of goods sold is $1,120,050.
Required: 1. Calculate the following risk ratios for 2024: 2. When we compare two companies, can one have a higher current ratio while the other has a higher acid-test ratio?
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Financial Accounting For MBAs
Authors: Easton, Wild, Halsey, McAnally
7th Edition
1618532316, 978-1618532312
