(a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $488,000, what isthe amount of current liabilities?Current liabilities $(b) A company had an average inventory last year of $206,000 and its inventory turnover was 6. If sales volume and unit cost remainthe same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year?Average inventory $Current ratio(c) A company has current assets of $99,000 (of which $44,000 is inventory and prepaid items) and current liabilities of $44,000. Whatis the current ratio? What is the acid-test ratio? If the company borrows $15,000 cash from a bank on a 120-day loan, what will itscurrent ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, e.g. 2.50.)Acid-test ratio122,000New current ratioNew acid-test ratio154,5002.25 :1:1:1Current ratio after the payment of the dividend:1(d) A company has current assets of $572,000 and current liabilities of $257,000. The board of directors declares a cash dividend of$190,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of thedividend? (Round answers to 2 decimal places, e.g. 2.50.)Current ratio after the declaration but before payment:1 (a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $488,000, what isthe amount of current liabilities?Current liabilities $(b) A company had an average inventory last year of $206,000 and its inventory turnover was 6. If sales volume and unit cost remainthe same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year?Average inventory $Current ratio(c) A company has current assets of $99,000 (of which $44,000 is inventory and prepaid items) and current liabilities of $44,000. Whatis the current ratio? What is the acid-test ratio? If the company borrows $15,000 cash from a bank on a 120-day loan, what will itscurrent ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, e.g. 2.50.)Acid-test ratio122,000New current ratioNew acid-test ratio154,5002.25 :1:1:1Current ratio after the payment of the dividend:1(d) A company has current assets of $572,000 and current liabilities of $257,000. The board of directors declares a cash dividend of$190,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of thedividend? (Round answers to 2 decimal places, e.g. 2.50.)Current ratio after the declaration but before payment:1

The question is related to Ratio Analysis. The formula used 1.Current Ratio is calculated with the…

(a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $488,000, what is the amount of current liabilities? Current liabilities $ (b) A company had an average inventory last year of $206,000 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? Average inventory $ Current ratio (c) A company has current assets of $99,000 (of which $44,000 is inventory and prepaid items) and current liabilities of $44,000. What is the current ratio? What is the acid-test ratio? If the company borrows $15,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, e.g. 2.50.) Acid-test ratio 122,000 New current ratio New acid-test ratio 154,500 2.25 :1 :1 :1 Current ratio after the payment of the dividend :1 (d) A company has current assets of $572,000 and current liabilities of $257,000. The board of directors declares a cash dividend of $190,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend? (Round answers to 2 decimal places, e.g. 2.50.) Current ratio after the declaration but before payment :1

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q