Based on the following data, what is the amount of quick assets? Accounts payable $30,000 Accounts receivable 45,000 Accrued liabilities 7,000 Cash 20,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Notes payable (short-term) 20,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000 Temporary investments 36,000 O a. $173,000 Ob. $175,000 O c. $101,000 O d. $65,000
Based on the following data, what is the amount of quick assets? Accounts payable $30,000 Accounts receivable 45,000 Accrued liabilities 7,000 Cash 20,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Notes payable (short-term) 20,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000 Temporary investments 36,000 O a. $173,000 Ob. $175,000 O c. $101,000 O d. $65,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![### Quick Assets Calculation
This exercise is designed to help you understand the concept of quick assets and how to calculate them using financial data. Quick assets are a category of assets that can be quickly converted into cash without significantly diminishing their value. They are used to measure a company’s liquidity.
Below is a list of various financial data points related to a hypothetical company's balance sheet. Your task is to identify which of these are quick assets and then sum their values to find the total amount of quick assets.
#### Financial Data:
- **Accounts payable**: $30,000
- **Accounts receivable**: $45,000
- **Accrued liabilities**: $7,000
- **Cash**: $20,000
- **Intangible assets**: $40,000
- **Inventory**: $72,000
- **Long-term investments**: $100,000
- **Long-term liabilities**: $75,000
- **Notes payable (short-term)**: $20,000
- **Property, plant, and equipment**: $625,000
- **Prepaid expenses**: $2,000
- **Temporary investments**: $36,000
#### Possible Answers:
- a. $173,000
- b. $175,000
- c. $101,000
- d. $65,000
### Explanation of Quick Assets
Quick assets typically include:
- Cash
- Accounts receivable
- Marketable securities (Temporary investments)
**Note**: Inventory and prepaid expenses are not part of quick assets because they cannot be quickly converted into cash.
### Calculation:
To find the amount of quick assets, add up the values of:
- Cash
- Accounts receivable
- Temporary investments
Therefore:
- **Cash**: $20,000
- **Accounts receivable**: $45,000
- **Temporary investments**: $36,000
### Total Quick Assets:
\[ 20,000 (Cash) + 45,000 (Accounts Receivable) + 36,000 (Temporary Investments) = 101,000 \]
Thus, the correct answer is:
- **c. $101,000**
Apply these principles and calculations to determine the amount of quick assets for any given set of financial data on your own.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fea00f92e-96e7-4f41-be23-6fd3c54ea7f1%2F3b3d5490-a8d6-4b60-804e-bcee4d33dce6%2Fd1fso2d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Quick Assets Calculation
This exercise is designed to help you understand the concept of quick assets and how to calculate them using financial data. Quick assets are a category of assets that can be quickly converted into cash without significantly diminishing their value. They are used to measure a company’s liquidity.
Below is a list of various financial data points related to a hypothetical company's balance sheet. Your task is to identify which of these are quick assets and then sum their values to find the total amount of quick assets.
#### Financial Data:
- **Accounts payable**: $30,000
- **Accounts receivable**: $45,000
- **Accrued liabilities**: $7,000
- **Cash**: $20,000
- **Intangible assets**: $40,000
- **Inventory**: $72,000
- **Long-term investments**: $100,000
- **Long-term liabilities**: $75,000
- **Notes payable (short-term)**: $20,000
- **Property, plant, and equipment**: $625,000
- **Prepaid expenses**: $2,000
- **Temporary investments**: $36,000
#### Possible Answers:
- a. $173,000
- b. $175,000
- c. $101,000
- d. $65,000
### Explanation of Quick Assets
Quick assets typically include:
- Cash
- Accounts receivable
- Marketable securities (Temporary investments)
**Note**: Inventory and prepaid expenses are not part of quick assets because they cannot be quickly converted into cash.
### Calculation:
To find the amount of quick assets, add up the values of:
- Cash
- Accounts receivable
- Temporary investments
Therefore:
- **Cash**: $20,000
- **Accounts receivable**: $45,000
- **Temporary investments**: $36,000
### Total Quick Assets:
\[ 20,000 (Cash) + 45,000 (Accounts Receivable) + 36,000 (Temporary Investments) = 101,000 \]
Thus, the correct answer is:
- **c. $101,000**
Apply these principles and calculations to determine the amount of quick assets for any given set of financial data on your own.
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