Question
Use the balance sheets of Glover shown below to calculate the following ratios for 2019 (round to 2 decimal places): (a) Current ratio. (b) Acid-test
Use the balance sheets of Glover shown below to calculate the following ratios for 2019 (round to 2 decimal places): (a) Current ratio.
(b) Acid-test ratio.
(c) Debt ratio.
(d) Equity ratio.
| Glover Company Balance Sheets December 31, 2019 and 2018 | ||
|
| 2019 | 2018 |
| Assets: |
|
|
| Cash | $43,000 | $22,000 |
| Accounts receivable | 38,000 | 42,000 |
| Merchandise inventory | 61,000 | 52,000 |
| Prepaid insurance | 6,000 | 9,000 |
| Long-term investments | 49,000 | 20,000 |
| Plant assets (net) | 218,000 | 218,000 |
| Total assets | $415,000 | $363,000 |
| Liabilities and Equity: |
|
|
| Current liabilities | $62,000 | $75,000 |
| Long-term liabilities | 45,000 | 36,000 |
| Common stock | 150,000 | 150,000 |
| Retained earnings | 158,000 | 102,000 |
| Total liabilities and equity | $415,000 | $363,000 |
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