Question
The following data were taken from the comparative balance sheet of Icon Living, Inc., for the years ended December 31, 20Y9 and December 31, 20Y8:
The following data were taken from the comparative balance sheet of Icon Living, Inc., for the years ended December 31, 20Y9 and December 31, 20Y8:
Dec. 31, 20Y9 | Dec. 31, 20Y8 | |||||||
Cash | $341,100 | $262,700 | ||||||
Temporary investments | 364,000 | 287,700 | ||||||
Accounts and notes receivable (net) | 334,900 | 313,600 | ||||||
Inventories | 468,000 | 388,800 | ||||||
Prepaid expenses | 212,000 | 115,200 | ||||||
Total current assets | $1,720,000 | $1,368,000 | ||||||
Accounts payable | $232,000 | $252,000 | ||||||
Accrued liabilities | 168,000 | 108,000 | ||||||
Total current liabilities | $400,000 | $360,000 |
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
20Y9 | 20Y8 | |||
Working capital | $fill in the blank 1 | $fill in the blank 2 | ||
Current ratio | fill in the blank 3 | fill in the blank 4 | ||
Quick ratio | fill in the blank 5 | fill in the blank 6 |
b. The liquidity of Icon Living, Inc., has
declinedimproved
from 20Y8 to the 20Y9. The working capital, current ratio, and quick ratio have all
decreasedincreasedstayed the same
. Most of these changes are the result of
an increase in current assetsan increase in current liabilities
.
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