Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 12, Problem 5SC
To determine
Identify the quick ratio.
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The following account values are from Baker Company's balance sheet:
Cash $10,000
Accounts Receivable $5,000
Inventory $25,000
Equipment $75,000
Buildings $100,000
Short-term Liabilities $15,000
Long-term Liabilities $50,000
What is Baker's quick ratio?
a. 0.70
b. 0.42
c. 2.33
d. 1.00
The quick ratio is 2.50 while the current ratio is 3.00. The only items presented as current assets in the balance sheet are cash, accounts receivable, and inventory. If the current liabilities if ₱600,000, how much is the inventory balance?
Based on the following data, what is the quick ratio (rounded to one decimal point)?
Accounts payable
$ 30,000
Accounts receivable
60,000
Accrued liabilities
5,000
Cash
30,000
Intangible assets
50,000
Inventory
69,000
Long-term investments
80,000
Long-term liabilities
100,000
Marketable securities
30,000
Fixed assets
670,000
Prepaid expenses
1,000
a.
3.4
b.
1.8
c.
3.0
d.
2.2
Chapter 12 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 12 - Prob. 1DQCh. 12 - Which amount is the base amount for vertical...Ch. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - How would you expect a recession to affect asset...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1SCCh. 12 - Prob. 2SCCh. 12 - Prob. 3SCCh. 12 - Prob. 4SCCh. 12 - Prob. 5SCCh. 12 - Prob. 6SCCh. 12 - Prob. 7SCCh. 12 - Prob. 8SCCh. 12 - Prob. 9SCCh. 12 - Prob. 10SCCh. 12 - Prob. 11SCCh. 12 - Prob. 12SCCh. 12 - Prob. 1SECh. 12 - Prob. 2SECh. 12 - Prob. 3SECh. 12 - Prob. 4SECh. 12 - Prob. 5SECh. 12 - Prob. 6SECh. 12 - Prob. 7SECh. 12 - Prob. 8SECh. 12 - Prob. 9SECh. 12 - Prob. 10SECh. 12 - Prob. 11AECh. 12 - Prob. 12AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 14AECh. 12 - Prob. 15AECh. 12 - Prob. 16AECh. 12 - Prob. 17AECh. 12 - Prob. 18AECh. 12 - Prob. 19AECh. 12 - Prob. 20AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 22BECh. 12 - Prob. 23BECh. 12 - Prob. 24BECh. 12 - Prob. 25BECh. 12 - Prob. 26BECh. 12 - Prob. 27BECh. 12 - Prob. 28BECh. 12 - Prob. 29BECh. 12 - Prob. 30BECh. 12 - Prob. 31APCh. 12 - Prob. 32APCh. 12 - Prob. 33APCh. 12 - Prob. 34APCh. 12 - Prob. 35APCh. 12 - Prob. 36APCh. 12 - Prob. 37BPCh. 12 - Prob. 38BPCh. 12 - Prob. 39BPCh. 12 - Prob. 40BPCh. 12 - Prob. 41BPCh. 12 - Prob. 42BPCh. 12 - Prob. 1CECh. 12 - Prob. 1CPCh. 12 - Prob. 1EIACh. 12 - Prob. 2EIACh. 12 - Prob. 1FACh. 12 - Prob. 1IACh. 12 - Prob. 1SBACh. 12 - Prob. 1WC
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- Jarem Company showed 189,000 in prepaid rent on December 31, 20X1. On December 31, 20X2, the balance in the prepaid rent account was 226,800. Rent expense for 20X2 was 472,500. Required: 1. What amount of cash was paid for rent in 20X2? 2. CONCEPTUAL CONNECTION What adjustment in prepaid expenses is needed if the indirect method is used to prepare Jarems statement of cash flows?arrow_forwardHummel Inc. has $30,000 in current assets and $15,000 in current liabilities. What is Hummels current ratio? a. 3 c. 1 b. 2 d. 0.5arrow_forwardA balance sheet included cash ($4,000,000), accounts receivable ($16,000,000), inventories ($10,000,000), prepaid expenses ($2,000,000), accounts payable ($9,000,000), and accrued expense ($7,000,000). These are the only current items. A. The quick ratio is 2:1. B. The quick ratio is 1.25:1. C. The current ratio is 1.875:1. D. Both A and C E. None of thesearrow_forward
- A company has a current ratio of 2.0. Cash is 20%, accounts receivable is 40%, and inventory is 40% of total current assets. What is the acid-test ratio for the company? A. 1.2 B. 1.6 C. 2.0 D. 0.8arrow_forwardBased on the following data, what is the quick ratio, rounded to one decimal point? Accounts payable $ 30,000 Accounts receivable 60,000 Accrued liabilities 4,000 Cash 60,000 Fixed assets 670,000 Intangible assets 50,000 Inventory 69,000 Long-term investments 80,000 Long-term liabilities 100,000 Prepaid expenses 1,000 Temporary investments 50,000 a.6.5 b.5.0 c.7.1 d.1.3arrow_forwardAccounting Based on the following data, what is the quick ratio, rounded to one decimal point? Accounts payable $38,000 Accounts receivable 69,000 Accrued liabilities 6,000 Cash 39,000 Intangible assets 55,000 Inventory 75,000 Long-term investments 83,000 Long-term liabilities 112,000 Marketable securities 34,000 Fixed assets 682,000 Prepaid expenses 11,000arrow_forward
- From the following data for David ProElecticals, calculate the quick ratio. Cash $ 68,500 Accounts receivable 130,000 Inventories 213,000 Prepaid expenses 25,000 Total current assets $436,500 Less current liabilities 275,000 Working capital $161,500 a. 1.6 b. 0.7 c. 0.3 d. 1.5arrow_forwardTheo Company’s Accounts Receivable amounted to 500,000. Prepaid Expense and Unearned Income are 30,000 and 10,000 respectively. Cash balance amounted to 100,000 while Accounts Payable and Inventory are 20,000 and 10,000 respectively. How much is the company’s current liabilities?arrow_forwardFrom the following list of accounts, calculate the quick ratio.Cash.......................................Accounts receivable................Inventory................................Prepaid insurance ...................$ 2,0007,00017,0001,000Accounts payable ............................Salary payable .................................Notes payable (due in two years) ....Short-term investments....................$ 5,0009,0008,0005,000a. 1.5b. 1.0c. 1.8d. 2.3arrow_forward
- XYZ Boutique had the following accounts at year end: Cash $250,000, Accounts Payable $70,000, Prepaid Expense $15,000, Non-current assets $500,000.00. What percentage of the boutique's total assets is current assets?arrow_forwardThe company's accounts receivable to 500,000. Prepaid Expenses and unearned income are 30,000 and 10,000respectively. Cash balance amounted to 100,000 while accounts payable and inventory are 20,000 and 10,000 respectively.How much is the company's current assets? Current liabilities?arrow_forwardGiven the following information, compute the current and quick ratios: Cash $ 90,000 Accounts receivable 355,000 Inventory 480,000 Current liabilities 535,000 Long-term debt 652,000 Equity 593,000 Round your answers to two decimal places. Current ratio: :1 Quick ratio: :1arrow_forward
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