Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An Audit Of Police Oversight In Africa

Authors: African Police Oversight Forum

1st Edition

1920299173, 978-1920299170

More Books

Students also viewed these Accounting questions

Question

Explain the advantages of using an FLP to protect family assets.

Answered: 1 week ago