Question
Use the financial data shown below to calculate the following ratios for the current year: (a) Current ratio. (b) Acid-test ratio. (c) Accounts receivable turnover.
Use the financial data shown below to calculate the following ratios for the current year: (a) Current ratio. (b) Acid-test ratio. (c) Accounts receivable turnover. (d) Days' sales uncollected. (e) Inventory turnover. (f) Days' sales in inventory.
Income statement data |
|
Sales (all on credit) | $650,000 |
Cost of goods sold | 425,000 |
Income before taxes | 78,000 |
Net income | 54,600 |
| Ending Balances | Beginning Balances |
Cash | $19,500 | $15,000 |
Accounts receivable (net) | 65,000 | 60,000 |
Inventory | 71,500 | 64,500 |
Plant and equipment (net) | 195,000 | 183,900 |
Total assets | $351,000 | $323,400 |
Current liabilities | $62,400 | $52,700 |
Long-term notes payable | 97,500 | 100,000 |
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