The following data were taken from the balance sheet of Mossberg Co. Dec. 31,2014 Dec. 31, 2013 Cash $700,000 $600,000 Marketable securities 800,000 620,000 Accounts and notes receivable (net) 920,000 780,000 Inventories 600,000 500,000 Prepaid expenses 500,000 500,000 --------------------- ------------------------- Total current assets $3,520,000 $3,000,000 ============== ================ Accounts and notes payable (short - term) $800,000 $750,000 Accrued liabilities 300,000 250,000 ---------------------------- ---------------------------- Total current liabilities $1,100,000 $1,000,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. b. What conclusion can be drawn from these data as to the company's ability to meet its currently maturing debts?
The following data were taken from the balance sheet of Mossberg Co. Dec. 31,2014 Dec. 31, 2013 Cash $700,000 $600,000 Marketable securities 800,000 620,000 Accounts and notes receivable (net) 920,000 780,000 Inventories 600,000 500,000 Prepaid expenses 500,000 500,000 --------------------- ------------------------- Total current assets $3,520,000 $3,000,000 ============== ================ Accounts and notes payable (short - term) $800,000 $750,000 Accrued liabilities 300,000 250,000 ---------------------------- ---------------------------- Total current liabilities $1,100,000 $1,000,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. b. What conclusion can be drawn from these data as to the company's ability to meet its currently maturing debts?
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 17E
Related questions
Question
The following data were taken from the balance sheet of Mossberg Co.
| Dec. 31,2014 | Dec. 31, 2013 | |
|---|---|---|
| Cash | $700,000 | $600,000 |
| Marketable securities | 800,000 | 620,000 |
| Accounts and notes receivable (net) | 920,000 | 780,000 |
| Inventories | 600,000 | 500,000 |
| Prepaid expenses | 500,000 | 500,000 |
| --------------------- | ------------------------- | |
| Total current assets | $3,520,000 | $3,000,000 |
| ============== | ================ | |
| Accounts and notes payable (short - term) | $800,000 | $750,000 |
| Accrued liabilities | 300,000 | 250,000 |
| ---------------------------- | ---------------------------- | |
| Total current liabilities | $1,100,000 | $1,000,000 |
a. Determine for each year (1) the
b. What conclusion can be drawn from these data as to the company's ability to meet its currently maturing debts?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Fundamentals of Financial Management, Concise Edi…
Finance
ISBN:
9781305635937
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning