Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $485,000, what is the amount of current liabilities? Current Liabilities (b) A company had an average inventory last year of $196,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? (Round answer to O decimal places, e.g. 125.) Average Inventory $ (c) A company has current assets of $89,000 (of which $42,000 is inventory and prepaid items) and current liabilities of $42,000. What is the current ratio? What is the acid-test ratio? If the company borrows $14,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, eg. 2.50.) Current Ratio :1 Acid Test Ratio :1 New Current Ratio :1 New Acid Test Ratio :1 (d) A company has current assets of $570,000 and current liabilities of $250,000. The board of directors declares a cash dividend of $196,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend? (Round answers to 2 decimal places, eg. 2.50.) Current ratio after the declaration but before payment Current ratio after the payment of the dividend :1
Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $485,000, what is the amount of current liabilities? Current Liabilities (b) A company had an average inventory last year of $196,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? (Round answer to O decimal places, e.g. 125.) Average Inventory $ (c) A company has current assets of $89,000 (of which $42,000 is inventory and prepaid items) and current liabilities of $42,000. What is the current ratio? What is the acid-test ratio? If the company borrows $14,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, eg. 2.50.) Current Ratio :1 Acid Test Ratio :1 New Current Ratio :1 New Acid Test Ratio :1 (d) A company has current assets of $570,000 and current liabilities of $250,000. The board of directors declares a cash dividend of $196,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend? (Round answers to 2 decimal places, eg. 2.50.) Current ratio after the declaration but before payment Current ratio after the payment of the dividend :1
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 67P
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Transcribed Image Text:Answer each of the questions in the following unrelated situations.
(a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $485,000, what
is the amount of current liabilities?
Current Liabilities
(b) A company had an average inventory last year of $196,000 and its inventory turnover was 5. If sales volume and unit cost remain
the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year?
(Round answer to 0 decimal places, e.g. 125.)
Average Inventory
(c) A company has current assets of $89,000 (of which $42,000 is inventory and prepaid items) and current liabilities of $42,000.
What is the current ratio? What is the acid-test ratio? If the company borrows $14,000 cash from a bank on a 120-day loan, what
will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, eg. 2.50.)
Current Ratio
:1
Acid Test Ratio
:1
New Current Ratio
:1
New Acid Test Ratio
:1
(d) A company has current assets of $570,000 and current liabilities of $250,000. The board of directors declares a cash dividend of
$196,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the
dividend? (Round answers to 2 decimal places, eg. 2.50.)
Current ratio after the declaration but before payment
:1
Current ratio after the payment of the dividend
:1
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