CONTEMP.FINANCIAL MGMT. (LL)-W/MINDTAP
14th Edition
ISBN: 9780357292877
Author: MOYER
Publisher: CENGAGE L
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Question
Chapter 3, Problem 8P
a)
Summary Introduction
To determine: Current ratio and quick ratios of Company J.
b)
Summary Introduction
To determine: Current ratio and quick ratio when company J takes $0.25 million in cash and pays $0.25 million of current liabilities.
c)
Summary Introduction
To determine: Current ratio and quick ratio when company J sells $0.5 million of its accounts receivables to bank and uses proceeds from short term debts.
d)
Summary Introduction
To determine: Current ratio and quick ratio when company J sells $1.0 million in new stock and places the proceeds in marketable securities.
e)
Summary Introduction
To discuss: The way these examples illustrate about quick ratio and current ratio.
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The Jamesway Printing Corporation has current assets of $3.2 million. Of this total, $1.2 million is inventory, $0.5 million is cash, $1.0 million is accounts
receivable, and the balance is marketable securities. Jamesway has $1.5 million in current liabilities. Round your answers to two decimal places.
a. What are the current and the quick ratios for Jamesway?
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Quick ratio:
b. If Jamesway takes $0.25 million in cash and pays off $0.25 million of current liabilities, what happens to its current and quick ratios? What happens to its
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New current ratio:
X
New quick ratio:
c. If Jamesway sells $0.6 million of its accounts receivable to a bank and uses the proceeds to pay off short-term debt obligations, what happens to its current
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New current ratio:
New quick ratio:
d. If Jamesway sells $1.2 million in new stock and places the proceeds in marketable securities, what happens to its current and quick ratios?
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You are evaluating the balance sheet for SophieLex’s Corporation. From the balance sheet you find the following balances: cash and marketable securities = $280,000; accounts receivable = $1,380,000; inventory = $2,280,000; accrued wages and taxes = $590,000; accounts payable = $890,000; and notes payable = $780,000.
What is the quick ratio (round your answer to 2 decimal places
You are evaluating the balance sheet for SophieLex’s Corporation. From the balance sheet you find the following balances: cash and marketable securities = $280,000; accounts receivable = $1,380,000; inventory = $2,280,000; accrued wages and taxes = $590,000; accounts payable = $890,000; and notes payable = $780,000.
Calculate SophieLex’s current ratio. (Round your answer to 2 decimal places.)
Calculate SophieLex’s quick ratio. (Round your answer to 2 decimal places.)
Calculate SophieLex’s cash ratio. (Round your answer to 2 decimal places.)
Chapter 3 Solutions
CONTEMP.FINANCIAL MGMT. (LL)-W/MINDTAP
Ch. 3 - Prob. 1QTDCh. 3 - Prob. 2QTDCh. 3 - Prob. 3QTDCh. 3 - Prob. 4QTDCh. 3 - Prob. 5QTDCh. 3 - Prob. 6QTDCh. 3 - Prob. 7QTDCh. 3 - Prob. 8QTDCh. 3 - Prob. 9QTDCh. 3 - Prob. 10QTD
Ch. 3 - Prob. 11QTDCh. 3 - Prob. 12QTDCh. 3 - Prob. 13QTDCh. 3 - Prob. 14QTDCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Prob. 16PCh. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21P
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