Assume that the current ratio for Arch Company is 3.5, its acid-test ratio is 2.0, and its working capital is $360,000. Answer each of the following questions independently, always referring to the original information. Required: How much does the firm have in current liabilities? Note: Do not round intermediate calculations. If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory? Note: Do not round intermediate calculations. If the firm collects an account receivable of $119,000, what will its new current ratio and working capital be?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Assume that the current ratio for Arch Company is 3.5, its acid-test ratio is 2.0, and its working capital is $360,000. Answer each of the following questions independently, always referring to the original information.

Required:

  1. How much does the firm have in current liabilities?

    Note: Do not round intermediate calculations.

  2. If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory?

    Note: Do not round intermediate calculations.

  3. If the firm collects an account receivable of $119,000, what will its new current ratio and working capital be?

 

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