Adieu Company reported the following current assets and liabilities for December 31 for two recent years: Dec. 31, Current Year Dec. 31, Previous Year Cash $1,000 $1,140 1,400 Temporary investments 1,200 Accounts receivable 800 910 Inventory Accounts payable 2,200 2,300 1,875 2,300 a. Compute the quick ratio on December 31 of both years. b. Interpret the company's quick ratio. Is the quick ratio improving or declining?

Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter11: Current Liabilities And Payroll
Section: Chapter Questions
Problem 23E: Quick ratio Gmeiner Co. had the following current assets and liabilities on December 31 of two...
icon
Related questions
Question
Adieu Company reported the following current assets and liabilities for December 31 for
two recent years:
Dec. 31, Current Year
Dec. 31, Previous Year
Cash
$1,000
$1,140
1,400
Temporary investments
1,200
Accounts receivable
800
910
Inventory
Accounts payable
2,200
2,300
1,875
2,300
a. Compute the quick ratio on December 31 of both years.
b. Interpret the company's quick ratio. Is the quick ratio improving or declining?
Transcribed Image Text:Adieu Company reported the following current assets and liabilities for December 31 for two recent years: Dec. 31, Current Year Dec. 31, Previous Year Cash $1,000 $1,140 1,400 Temporary investments 1,200 Accounts receivable 800 910 Inventory Accounts payable 2,200 2,300 1,875 2,300 a. Compute the quick ratio on December 31 of both years. b. Interpret the company's quick ratio. Is the quick ratio improving or declining?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Similar questions
Recommended textbooks for you
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning