Assume that the current ratio for Delta Enterprises is 2.8, its acid-test ratio is 1.2, and its working capital is $420,000. Required: a. How much does the firm have in current liabilities? b. If the only current assets shown on the balance sheet for Delta Enterprises are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory?
Assume that the current ratio for Delta Enterprises is 2.8, its acid-test ratio is 1.2, and its working capital is $420,000. Required: a. How much does the firm have in current liabilities? b. If the only current assets shown on the balance sheet for Delta Enterprises are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 20MCQ
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Transcribed Image Text:Assume that the current ratio for Delta Enterprises is 2.8,
its acid-test ratio is 1.2, and its working capital is
$420,000.
Required:
a. How much does the firm have in current liabilities?
b. If the only current assets shown on the balance sheet
for Delta Enterprises are Cash, Accounts Receivable, and
Merchandise Inventory, how much does the firm have in
Merchandise Inventory?
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