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Liquidity Analysis The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: Beginning balances: Inventory Accounts receivable Ending balances: Inventory Accounts receivable Cash Marketable securities (short-term) Prepaid expenses Accounts payable Taxes payable Wages payable Short-term loans payable $200,000 300,000 250,000 400,000 100,000 200,000 50,000 175,000 85,000 90,000 50,000

Liquidity Analysis The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: Beginning balances: Inventory Accounts receivable Ending balances: Inventory Accounts receivable Cash Marketable securities (short-term) Prepaid expenses Accounts payable Taxes payable Wages payable Short-term loans payable $200,000 300,000 250,000 400,000 100,000 200,000 50,000 175,000 85,000 90,000 50,000

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...
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Liquidity Analysis The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: Beginning balances: Inventory Accounts receivable Ending balances: Inventory Accounts receivable Cash $200,000 300,000 250,000 400,000 Compute the inventory turnover in days. days. 100,000 Marketable securities (short-term) Prepaid expenses Accounts payable Taxes payable Wages payable 90,000 Short-term loans payable 50,000 During the year, Arnn had net sales of $2.45 million. The cost of goods sold was $1.3 million. Required: 200,000 50,000 175,000 85,000 When required, round your answers to two decimal places. Assume 365 days per year. Compute the current ratio. Compute the quick or acid-test ratio. Compute the accounts receivable turnover ratio. times Compute the accounts receivable turnover in days. days . Compute the inventory turnover ratio. times
Transcribed Image Text:Liquidity Analysis The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: Beginning balances: Inventory Accounts receivable Ending balances: Inventory Accounts receivable Cash $200,000 300,000 250,000 400,000 Compute the inventory turnover in days. days. 100,000 Marketable securities (short-term) Prepaid expenses Accounts payable Taxes payable Wages payable 90,000 Short-term loans payable 50,000 During the year, Arnn had net sales of $2.45 million. The cost of goods sold was $1.3 million. Required: 200,000 50,000 175,000 85,000 When required, round your answers to two decimal places. Assume 365 days per year. Compute the current ratio. Compute the quick or acid-test ratio. Compute the accounts receivable turnover ratio. times Compute the accounts receivable turnover in days. days . Compute the inventory turnover ratio. times
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