Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 7, Problem 16SE
Quick ratio (Learning Objective 7) 5–10 min.
Calculate the quick assets and the quick ratio for each of the following companies:
| Rhodes | Peters | |
| Cash ............................................... | $15,000 | $ 23,000 |
| Short-term Investments ................................ | 6,000 | 13,000 |
| Net Receivables.......................................................................... | 41,000 | 51,000 |
| Current Liabilities .............................................................. | 40,000 | 108,750 |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
E1-24A. (Learning Objective 4: Construct a balance sheet) At December 31, 2018, LandyProducts has cash of $24,000, receivables of $18,000, and inventory of $80,000. The company’sequipment totals $182,000. Landy owes accounts payable of $22,000 and long-term notespayable of $172,000. Common stock is $34,500. Prepare Landy’s balance sheet at December 31,2018, complete with its proper heading. Use the accounting equation to compute retainedearnings.
E3-39B. (Learning Objective 6: Analyze and evaluate liquidity and debt-paying ability) BurnesConsulting Company reported these ratios at December 31, 2018 (dollar amounts in millions):Current ratio = $20 = 2.00 $10 $60 Debt ratio = = 0.50 $30Burnes Consulting completed these transactions during 2019:a. Purchased equipment on account, $4b. Paid long-term debt, $7c. Collected cash from customers in advance, $5d. Accrued interest expense, $6e. Made cash sales, $8Determine whether each transaction improved or hurt the company’s current ratio and debt ratio.
(Learning Objective 2: Calculate days’ payable outstanding) The balance of LandyCorporation’s accounts payable at the beginning of the most recent year was $50,000. At theend of the year, the accounts payable balance was $54,000. Landy’s sales revenue for the yearwas $3,105,000, while its cost of goods sold for the year was $1,508,000. Calculate Landy’sdays’ payable outstanding (DPO) for the year. Assume inventory levels are constant throughoutthe year. If the credit terms from Landy’s suppliers are n/30, how would you interpret Landy’sDPO?
Chapter 7 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 7.A - Prob. 1SECh. 7.A - Prob. 2SECh. 7.A - Prob. 3AECh. 7.A - Prob. 4AECh. 7.A - Prob. 5BECh. 7.A - Prob. 6BECh. 7.A - Prob. 7APCh. 7.A - Prob. 8APCh. 7 - Which duties should be segregated in the...Ch. 7 - Prob. 2DQ
Ch. 7 - Prob. 3DQCh. 7 - Why does the allowance method of accounting for...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - How would the net realizable value of Accounts...Ch. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 1SCCh. 7 - Prob. 2SCCh. 7 - Prob. 3SCCh. 7 - Prob. 4SCCh. 7 - Prob. 5SCCh. 7 - Prob. 6SCCh. 7 - Prob. 7SCCh. 7 - Prob. 8SCCh. 7 - Prob. 9SCCh. 7 - Prob. 10SCCh. 7 - Prob. 11SCCh. 7 - Prob. 12SCCh. 7 - Prob. 1SECh. 7 - Prob. 2SECh. 7 - Prob. 3SECh. 7 - Prob. 4SECh. 7 - Prob. 5SECh. 7 - Prob. 6SECh. 7 - Prob. 7SECh. 7 - Prob. 8SECh. 7 - Prob. 9SECh. 7 - Prob. 10SECh. 7 - Prob. 11SECh. 7 - Prob. 12SECh. 7 - Prob. 13SECh. 7 - Prob. 14SECh. 7 - Prob. 15SECh. 7 - Quick ratio (Learning Objective 7) 510 min....Ch. 7 - Prob. 17SECh. 7 - Prob. 18AECh. 7 - Prob. 19AECh. 7 - Prob. 20AECh. 7 - Prob. 21AECh. 7 - Prob. 22AECh. 7 - Prob. 23AECh. 7 - Prob. 24AECh. 7 - Prob. 25AECh. 7 - Prob. 26AECh. 7 - Prob. 27AECh. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 29AECh. 7 - Prob. 30BECh. 7 - Prob. 31BECh. 7 - Prob. 32BECh. 7 - Prob. 33BECh. 7 - Prob. 34BECh. 7 - Prob. 35BECh. 7 - Prob. 36BECh. 7 - Prob. 37BECh. 7 - Prob. 38BECh. 7 - Prob. 39BECh. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 41BECh. 7 - Prob. 42APCh. 7 - Prob. 43APCh. 7 - Prob. 44APCh. 7 - Prob. 45APCh. 7 - Prob. 46APCh. 7 - Prob. 47APCh. 7 - Prob. 48APCh. 7 - Prob. 49BPCh. 7 - Prob. 50BPCh. 7 - Prob. 51BPCh. 7 - Prob. 52BPCh. 7 - Prob. 53BPCh. 7 - Prob. 54BPCh. 7 - Prob. 55BPCh. 7 - Continuing Exercise In this exercise, we continue...Ch. 7 - Prob. 1CPCh. 7 - Prob. 1CFSAPCh. 7 - Prob. 1EIACh. 7 - Prob. 2EIACh. 7 - Prob. 1FACh. 7 - Prob. 1IACh. 7 - Prob. 1SBACh. 7 - Prob. 1WC
Additional Business Textbook Solutions
Find more solutions based on key concepts
S4–12 Identifying accounts included on a post–closing trail balance
Learning Objective 4
Office Supplies
Inte...
Horngren's Accounting (11th Edition)
Discussion Analysis A13-41 Discussion Questions 1. How do managers use the statement of cash flows? 2. Describ...
Managerial Accounting (4th Edition)
If there are deviations from the stated goals and objectives, what steps can managers take to get back on track...
Principles of Accounting Volume 2
S6-2 Determining inventory costing methods
Ward Hard ware does not expect costs to change dramatically and want...
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Communication Activity 9-1
In 150 words or fewer, explain the different methods that can be used to calculate d...
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
LO 3, 4 (Learning Objectives 3, 4: Evaluate business operations through financial statements; correct errors; c...
Financial Accounting (12th Edition) (What's New in Accounting)
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.Similar questions
- Learning Objective 7: Calculate return on assets) In 2018, Ambrosia Corporation LO 7reported $100 million in sales, $18 million in net income, and average total assets of $200 million.What is Ambrosia’s return on assets in 2018?arrow_forwardE1-31A. (Learning Objective 4: Construct an income statement, statement of retainedearnings, and balance sheet) During 2018, Edwin Company earned revenues of $150million. Edwin incurred, during that same year, salary expense of $34 million, rent expenseof $23 million, and utilities expense of $16 million. Edwin declared and paid dividends of$16 million during the year. At December 31, 2018, Edwin had cash of $185 million, accountsreceivable of $70 million, property and equipment of $35 million, and other long-term assetsof $22 million. At December 31, 2018, the company owed accounts payable of $56 millionand had a long-term note payable of $26 million. Edwin began 2018 with a balance in retainedearnings of $73 million. At December 31, 2018, Edwin had total stockholders’ equity of$230 million, which consisted of common stock and retained earnings. Edwin has a year-end ofDecember 31. Prepare the following financial statements (with proper headings) for 2018:1. Income statement,2.…arrow_forwardS1-12. (Learning Objective 4: Construct an income statement) MacKensie ServicesCorporation began 2018 with total assets of $230 million and ended 2018 with totalassets of $365 million. During 2018, MacKensie earned revenues of $394 million and hadexpenses of $171 million. MacKensie declared and paid dividends of $27 million in 2018.Prepare the company’s income statement for the year ended December 31, 2018, completewith an appropriate heading.arrow_forward
- (Learning Objective 7: Calculate return on assets) Hometown Supply Companyreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$84,000$ 4,200$70,000$82,600$ 4,050$69,450Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forward(Learning Objective 4: Calculate the effects of business transactions on selectedratios) Financial statement data of Greatland Engineering include the following items:Cash ........................................Short-term investments..............Accounts receivable, net............Inventories ................................Prepaid expenses.......................Total assets ...............................Short-term notes payable...........$ 26,00036,00085,000147,0006,000677,00049,000Accounts payable ......................Accrued liabilities......................Long-term notes payable ...........Other long-term liabilities.........Net income................................Number of commonshares outstanding ...........$107,00032,000163,00034,00099,00046,000Requirements1. Calculate Greatland’s current ratio, debt ratio, and earnings per share. Round all ratios totwo decimal places.2. Calculate the three ratios after evaluating the effect of each transaction that follows.Consider each…arrow_forward(Learning Objective 5: Apply GAAP for uncollectible receivables) AtDecember 31, 2018, Concord Travel Agency has an Accounts Receivable balance of $87,000.Allowance for Uncollectible Accounts has a credit balance of $880 before the year-end adjustment. Service revenue (all on account) for 2018 was $800,000. Concord estimates that itsuncollectible-account expense for the year is 3% of service revenue. Make the year-end entryto record uncollectible-account expense. Show how Accounts Receivable and Allowance forUncollectible Accounts are reported on the balance sheet at December 31, 2018arrow_forward
- P1-65A. (Learning Objectives 3, 4: Evaluate business operations; construct and analyzean income statement, a statement of retained earnings, and a balance sheet) The assetsand liabilities of Oak Hill Garden Supply, Inc., as of December 31, 2018, and revenues andexpenses for the year ended on that date are as follows:Equipment........................... $110,000Interest expense................... 10,300Interest payable ................... 2,700Accounts payable ................ 26,000Salary expense..................... 108,400Building............................... 406,000Cash.................................... 44,000Common stock.................... 13,800Land................................... $ 25,000Note payable...................... 99,600Property tax expense .......... 7,400Rent expense ...................... 41,200Accounts receivable............ 84,900Service revenue................... 452,600Supplies.............................. 6,300Utilities expense .................…arrow_forward(Learning Objective 7: Calculate return on assets) Handley Grocery Corporationreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$50,000$ 2,200$40,000$48,350$ 2,100$39,300Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forward(Learning Objective 4: Construct the financial statements) Suppose Robin SportingGoods Company reported the following data at July 31, 2018, with amounts in thousands:Cost of goods sold................. $136,800Cash...................................... 50,000Property and equipment, net ... 19,400Common stock...................... 26,000Inventories ............................ 36,000Long-term liabilities.............. 11,700Dividends.............................. 0Retained earnings,July 31, 2017 ............ $ 31,500Accounts receivable....... 34,000Net revenues ................. 191,000Total current liabilities.. 80,000All other expenses......... 29,000Other current assets ...... 5,000Other assets................... 30,000Use these data to prepare Robin Sporting Goods Company’s single-step income statement forthe year ended July 31, 2018; statement of retained earnings for the year ended July 31, 2018;and classified balance sheet at July 31, 2018. Use the report format for the balance…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Economic Value Added EVA - ACCA APM Revision Lecture; Author: OpenTuition;https://www.youtube.com/watch?v=_3hpcMFHPIU;License: Standard Youtube License