Foremost Manufacturing wants to buy $50,000 of sheet metal from Ore Industries on credit. Before agreeing to the sale, Ore decides to evaluate Foremost’s financial status. Of the following potential findings, which would lead Ore to refuse to sell the metal on credit? Foremost’s current liabilities are $450,000 and its current assets are $475,000. Foremost’s accounts receivable are $22,000 and its accounts payable are $21,000. Foremost’s current assets are $450,000 and its current liabilities are $475,000. Foremost’s accounts payable are $22,000 and its accounts receivable are $21,000.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 16P
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Foremost Manufacturing wants to buy $50,000 of sheet metal from Ore Industries on credit. Before agreeing to the sale, Ore decides to evaluate Foremost’s financial status. Of the following potential findings, which would lead Ore to refuse to sell the metal on credit?

Foremost’s current liabilities are $450,000 and its current assets are $475,000.

Foremost’s accounts receivable are $22,000 and its accounts payable are $21,000.

Foremost’s current assets are $450,000 and its current liabilities are $475,000.

Foremost’s accounts payable are $22,000 and its accounts receivable are $21,000.

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