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Calculate current ratio, quick ratio and receivable turnover ratio

Calculate current ratio, quick ratio and receivable turnover ratio

FINANCIAL ACCOUNTING
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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Calculate current ratio, quick ratio and receivable turnover ratio
Perfect Cover Insurance Brokers COMPARATIVE BALANCE SHEETS AS AT JUNE 30 Closing Balances Opening Balances Current Assets Cash on Hand 833 817 Cash at Bank 10,114 6,540 Accounts Receivable 23,287 14,842 Less Allowance 2,573 20,714 1,442 13,400 Inventory 6,300 5,200 Prepaid Insurance 800 38,761 260 26.217 Non Current Assets Office Furniture 3,000 3,000 less Acc. Depreciation Office Equipment less Acc. Depreciation 600 2,400 300 2,700 5,220 5,000 470 4,750 5,000 Vehicles 35,200 35,200 less Acc. Depreciation 12,160 23,040 6,400 28,800 Building 40,000 40,000 less Acc. Depreciation 18,667 21,333 13,334 26,666 Land 60,000 60,000 Total Assets 150.284 149,383 Current Liabilities Accounts Payable 6,100 7,960 Accrued Expenses 750 6,850 585 8,545 Non Current Liabilities Loan 7,600 2,600 Total Liabilities 14,450 11,145 Net Assets 135.834 138,238 Equity Capital 135.834 138.238
Transcribed Image Text:Perfect Cover Insurance Brokers COMPARATIVE BALANCE SHEETS AS AT JUNE 30 Closing Balances Opening Balances Current Assets Cash on Hand 833 817 Cash at Bank 10,114 6,540 Accounts Receivable 23,287 14,842 Less Allowance 2,573 20,714 1,442 13,400 Inventory 6,300 5,200 Prepaid Insurance 800 38,761 260 26.217 Non Current Assets Office Furniture 3,000 3,000 less Acc. Depreciation Office Equipment less Acc. Depreciation 600 2,400 300 2,700 5,220 5,000 470 4,750 5,000 Vehicles 35,200 35,200 less Acc. Depreciation 12,160 23,040 6,400 28,800 Building 40,000 40,000 less Acc. Depreciation 18,667 21,333 13,334 26,666 Land 60,000 60,000 Total Assets 150.284 149,383 Current Liabilities Accounts Payable 6,100 7,960 Accrued Expenses 750 6,850 585 8,545 Non Current Liabilities Loan 7,600 2,600 Total Liabilities 14,450 11,145 Net Assets 135.834 138,238 Equity Capital 135.834 138.238
Following her attempts to expand Rita is keen to understand more about the position her business is in. While she has been able to create some accounting reports, which she has provided below with some extra notes, she is not really clear on what they are telling her (although she is happy to see she has made a profit). Perfect Cover Insurance Brokers INCOME STATEMENT FOR THE YEAR ENDED JUNE 30 Net Sales 33,700 COGS 14,650 19,050 Other Revenue: Commissions 20,800 Expenses: Operating Expenses Miscellaneous Expenses 17,760 1,220 Doubtful Debts Expense 3,073 Depreciation Expenses 11,893 Interest Expense 900 Loss on Coffee Machine 950 35,796 Profit / Loss 4,054 On the last day of the period Rita's office equipment (coffee machine) exploded and had to be scrapped. Rita replaced the old machine which had a cost of $980 with a new one which was paid for in cash. At the time of disposal, the old coffee machine had accumulated depreciation of $30.
Transcribed Image Text:Following her attempts to expand Rita is keen to understand more about the position her business is in. While she has been able to create some accounting reports, which she has provided below with some extra notes, she is not really clear on what they are telling her (although she is happy to see she has made a profit). Perfect Cover Insurance Brokers INCOME STATEMENT FOR THE YEAR ENDED JUNE 30 Net Sales 33,700 COGS 14,650 19,050 Other Revenue: Commissions 20,800 Expenses: Operating Expenses Miscellaneous Expenses 17,760 1,220 Doubtful Debts Expense 3,073 Depreciation Expenses 11,893 Interest Expense 900 Loss on Coffee Machine 950 35,796 Profit / Loss 4,054 On the last day of the period Rita's office equipment (coffee machine) exploded and had to be scrapped. Rita replaced the old machine which had a cost of $980 with a new one which was paid for in cash. At the time of disposal, the old coffee machine had accumulated depreciation of $30.
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