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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

For Belzcr Corporation, the working capital at the end of the current year is $24,000 more than the working capital at the end of the preceding year, reported as follows:

To determine

Concept Introduction:

Current Ratio:

Current Ratio is the measure of the company's ability to pay off its current liabilities using its current assets. It is calculated by dividing the total current assets by total current liabilities. The formula of the current ratio is as follows:

  Current Ratio=Current assetsCurrent liabilities

To Indicate:

If company's current position has improved.

Explanation

The current ratio of company in the Preceding year is (198000/60000) = 3.3.

The current ratio of company in the Current year is (252000/90000) = 2...

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