I need help to determine the following; 2. For P & B Manufacturing to assess its liquidity at the end of the year to calculate the current ratio AND the acid-test (quick) ratio. Include calculations and round answers to 2 decimal places. 2a2bTo assess the liquidity at the end of the year calculate Current Ratio and Acid-test (quick). Round your answers to 2decimal places-for example 5.67Calculate the Current RatioCalculate the Acid-test (quick) ratioProvide the support calculations for your ratios in the area below. For example 56.70/10-5.67 Current assets:Cash and cash equivalentsAccounts ReceivableInventoryTotal current assetsProperty, plant and equipmentLess accumulated depreciationNet property, plant and equipmentTotal assetsCurrent liabilities:Accounts payableAccrued liabilitiesIncome taxes payableTotal current liabilitiesP & B ManufacturingComparative Balance Sheet(dollars in millions)Bonds payableTotal liabilitiesStockholders' equity:Common stockRetained earningsAssetsEnding BalanceLiabilities and Stockholders' EquityTotal stockholders' equityTotal liabilities and stockholders' equity655306001,1951,7196401,0792,27418094723461805268009481,7482,274Beginning Balance915725801,2431,6564801,1762,419180105883733106838009361,7362,419P & B ManufacturingIncome StatementFor Year Ended December 31(dollars in millions)SalesCost of goods soldGross MarginSelling and administrative expensesNet operating incomeNonoperating items: Gain on sale of equipmentIncome before taxesIncome taxesNet Income4,4503,550900820804842955P & B Manufacturing also provided the following information:1 The company sold equipment that had an original cost of $15 million andaccumulated depreciation of $9 million. The cash proceeds from the sale were$11 million. The gain on the sale was $4 million.2The company did not issue any new bonds during the year3The company paid a cash dividend during the year4 The company did not complete any common stock transactions during theyear

Quick ratio alternatively known as Acid-test ratio is one of the types of financial ratio (i.e,…

Answered: 2. For P & B Manufacturing to assess…

2. For P & B Manufacturing to assess its liquidity at the end of the year to calculate the current ratio AND the acid-test (quick) ratio. Include calculations and round answers to 2 decimal places.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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