CengageNOWv2, 1 term Printed Access Card for Warren's Survey of Accounting, 8th
8th Edition
ISBN: 9781305961982
Author: Carl Warren
Publisher: Cengage Learning
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Textbook Question
Chapter 3, Problem 3.6.1MBA
Quick ratio
The Gap Inc. (GPS)operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements.
Compute quick assets for Years 2 and 1.
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The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements.
Year 2
Year 1
Current assets:
Cash
$1,515
$1,510
Accounts receivable
275
462
Inventory
1,889
1,928
Prepaid and other current assets
638
530
Total current assets
$4,317
$4,430
Total current liabilities
$2,234
$2,342
1. Compute quick assets for Years 2 and 1.
2. Compute the quick ratio for Years 2 and 1.
3. The Gap’s quick assets have _______ from Year 1 to Year
2. Its quick ratio ______ from fill ______ in Year 1 to ______ in Year 2. Overall, The Gap’s liquidity position has _______ from Year 1 to Year 2.
Given the following financial statements for Voice-Soft, a voice recognition company, answer the questions on the next page.
Income Statements
Year Ended December 31,
20X2
20X1
Sales
8000
5000
Cost of goods sold (COGS)
7300
4380
EBITDA
700
620
Depreciation and Amortization
200
120
EBIT
500
500
Interest Expense
75
100
EBT
425
400
Taxes (20%)
85
80
Net Income
340
320
Balance Sheets
As of December 31,
20X2
20X1
Assets
Current assets:
Cash
300
20
Short term investments
460
100
Accounts receivable
640
400
Inventories
800
480
Total current assets
2200
1000
Net plant and equipment
1800
1500
Total assets
4000
2500
Liabilities and Stockholders' Equity
Current liabilities:
Notes…
Following are data from the statements of two companies selling comparable products:Current Year-End Balance Sheets Nike Zing Company CompanyCash............................................................................................. 119.00 180.00Notes receivable ........................................................................... 77.00 32.00Accounts receivable, net ............................................................... 420.00 640.00Merchandise inventory ................................................................. 588.00 877.00Prepaid expenses…
Chapter 3 Solutions
CengageNOWv2, 1 term Printed Access Card for Warren's Survey of Accounting, 8th
Ch. 3 - Assume that a lawyer bills her clients $15000 on...Ch. 3 - On January 24, 20Y8, Niche Consulting collected...Ch. 3 - Prob. 3SEQCh. 3 - If the supplies account indicated a balance of...Ch. 3 - The balance in the unearned rent account for Jones...Ch. 3 - Would AT&T and Microsoft Use the cash basis or the...Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Fees for services provided are billed to a...Ch. 3 - Employees performed services in 20Y8, but the...Ch. 3 - Prob. 5CDQ
Ch. 3 - Is the Land balance before the accounts have been...Ch. 3 - Is the Supplies balance before the accounts have...Ch. 3 - Prob. 8CDQCh. 3 - Prob. 9CDQCh. 3 - Prob. 10CDQCh. 3 - If the effect of an adjustment is to increase the...Ch. 3 - Prob. 12CDQCh. 3 - (a) Explain the purpose of the accounts...Ch. 3 - Prob. 14CDQCh. 3 - Transactions using accrual accounting Terry Mason...Ch. 3 - Adjustment process Using the data from Exercise...Ch. 3 - Financial statements Using the data from Exercises...Ch. 3 - Prob. 3.4ECh. 3 - Accrual basis of accounting Margie Van Epps...Ch. 3 - Classify accruals and deferrals Classify the...Ch. 3 - Classify adjustments The following accounts were...Ch. 3 - Adjustment for supplies Answer each of the...Ch. 3 - Adjustment for prepaid insurance The prepaid...Ch. 3 - Adjustment for unearned fees The balance in the...Ch. 3 - Adjustment for unearned revenue For a recent year....Ch. 3 - Effect of omitting adjustment At the end of...Ch. 3 - Adjustment for accrued salaries Laguna Realty Co....Ch. 3 - Determine wages paid The balances of the two...Ch. 3 - Effect of omitting adjustment Accrued salaries of...Ch. 3 - Effect of omitting adjustment Assume that the...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Adjustment for accrued fees At the end of the...Ch. 3 - Adjustments for unearned and accrued fees The...Ch. 3 - Effect on financial statements of omitting...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Adjustments Clean Air Company is a consulting firm...Ch. 3 - Book value of fixed assets For a recent year....Ch. 3 - Classify assets Identify each of the following as...Ch. 3 - Balance sheet classification At the balance sheet...Ch. 3 - Classified balance sheet Pounds-Away Services Co....Ch. 3 - Prob. 3.29ECh. 3 - Balance sheet List any errors you can find in the...Ch. 3 - Accrual basis accounting San Mateo Health Care...Ch. 3 - Prob. 3.2PCh. 3 - Financial statements Data for San Mateo Health...Ch. 3 - Statement of cash flows Data for San Mateo Health...Ch. 3 - Statement of cash flows Data for San Mateo Health...Ch. 3 - Adjustments and errors At the end of May, the...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Prob. 3.1MBACh. 3 - Prob. 3.2MBACh. 3 - Prob. 3.3MBACh. 3 - Prob. 3.4MBACh. 3 - Prob. 3.5.1MBACh. 3 - Prob. 3.5.2MBACh. 3 - Prob. 3.5.3MBACh. 3 - Prob. 3.5.4MBACh. 3 - Quick ratio The Gap Inc. (GPS)operates specialty...Ch. 3 - Prob. 3.6.2MBACh. 3 - Quick ratio The Gap Inc. (GPs)operates specialty...Ch. 3 - Quick ratio American Eagle Outfitters Inc. (AEO)...Ch. 3 - Quick ratio American Eagle Outfitters Inc. (AEO)...Ch. 3 - Prob. 3.7.3MBACh. 3 - Prob. 3.8MBACh. 3 - Prob. 3.9.1MBACh. 3 - Prob. 3.9.2MBACh. 3 - Prob. 3.9.3MBACh. 3 - Prob. 3.1CCh. 3 - Adjustments for financial statements Several years...Ch. 3 - Prob. 3.3.1CCh. 3 - Prob. 3.3.2CCh. 3 - Prob. 3.4.1CCh. 3 - Prob. 3.4.2CCh. 3 - Accrual versus cash net income. Cigna Corp. (CI)...Ch. 3 - Prob. 3.5.1CCh. 3 - Prob. 3.5.2C
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Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License