Valley Bleu Ltée reported the following current accounts at December 31, 2013 (amounts in thousands): a. Cash

Question:

Valley Bleu Ltée reported the following current accounts at December 31, 2013 (amounts in thousands):
a. Cash ......................................................................................................... $1,700
b. Receivables ............................................................................................... 5,600
c. Inventory .................................................................................................. 1,800
d. Prepaid expenses ...................................................................................... 800
e. ...................................................................................... 2,400
f. Unearned revenue ..................................................................................... 1,200
g. Accrued expenses payable ........................................................................ 1,700
During 2014, Valley Bleu completes these transactions:
• Used inventory of $3,800
• Sold services on account, $6,500
• Depreciation expense, $400
• Paid for accrued expenses, $500
• Collected from customers on account, $7,500
• Accrued expenses, $1,300
• Purchased inventory of $3,500 on account
• Paid on account, $5,000
• Used up prepaid expenses, $600
Compute Valley Bleu's current ratio at December 31, 2013, and again at December 31, 2014. Did the current ratio improve or deteriorate during 2014? Comment on the company's current ratio.
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...