A. Calculate the current ratio for Pearson and litt for 2019.B.explain the results of the current test ratio. Include the minimum ratio recommended for the ratio in your answer Consider the information provided below as well as the financial statements and answer thequestions that follow.Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glasswine bottles for the Blue Valley Beer Co.20192020Sales price per unitR15R19Variable cost per unitRGR7Fixed cost (FC) per annumR650 000R 855 500Fixed cost per unitR3R4Current assetsR450600R560 700Current liabilitiesR510000R780 000Retained profitR21 809R17600Net SalesR2 900 320R3100 100Cost of salesR390 000R475000

Name: A. Calculate the current ratio for Pearson and litt for 2019.B.explain
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Description: A. Calculate the current ratio for Pearson and litt for 2019.B.explain the results of the current test ratio. Include the minimum ratio recommended for the ratio in your answer Consider the information provided below as well as the financial statemen

Current ratio is calculated by using the formula: Current ratio =Current AssetCurrent Liability

Answered: . Calculate the current ratio for…

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. Calculate the current ratio for Pearson and litt for 2019. B.explain the results of the current test ratio. Include the minimum ratio recommended for the ratio in your ans

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Consider the info provided below as well as the financial statements and answer the questions that follow.Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass wine bottles for the Blue Valley Beer Co. For 2019 and 2020 respectively :Sales price per unit R15 and R19Variable cost per unit R6 and R7Fixed cost (FC) per annum R650 000 and R 855 500Fixed cost per unit R3 and R4Current assets R450 600 and R560 700Current liabilities R510 000 and R780 000Retained profit R21 809 and R17 600Net Sales R2 900 320 and R 3 100 100Cost of sales R390 000 and R475 000 The current ratio reflects the relationship between the value of the current assets and the extent of the current liabilities of a business.Q.1 Calculate the current ratio for Pearson & Litt for 2019. Q.2 Explain the results of the current‐test ratio.HINT: Include the minimum ratio recommended for the ratio in youranswer.
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