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Calculate the acid test ratio.

Calculate the acid test 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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Subject :- Accounting 

LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2022 and 2023 2023 Gross sales Sales returns and allowances Net sales Cost of merchandise (goods) sold Gross profit Operating expenses: Depreciation Selling and administrative Research Miscellaneous Total operating expenses Income before interest and taxes. Interest expense Income before taxes Provision for taxes Net income Current assets: Cash Accounts receivable Merchandise inventory Prepaid expenses Assets Total current assets $ 19,000 1,000 $ 18,000 12,000 $6,000 $ 700 2,200 550 360 $3,810 $ 2,190 560 $1,630 640 $990 LOGIC COMPANY Comparative Balance Sheet December 31, 2022 and 2023 2022 $ 15,000 100 $ 14,900 9,000 $5,900 $ 600 2,000 500 300 $3,400 $ 2,500 500 $ 2,000 800 $ 1,200 2023 $ 12,000 16,500 8,500 24,000 $ 61,000 2022 $ 9,000 12,500 14,000 10,000 $ 45,500
Transcribed Image Text:LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2022 and 2023 2023 Gross sales Sales returns and allowances Net sales Cost of merchandise (goods) sold Gross profit Operating expenses: Depreciation Selling and administrative Research Miscellaneous Total operating expenses Income before interest and taxes. Interest expense Income before taxes Provision for taxes Net income Current assets: Cash Accounts receivable Merchandise inventory Prepaid expenses Assets Total current assets $ 19,000 1,000 $ 18,000 12,000 $6,000 $ 700 2,200 550 360 $3,810 $ 2,190 560 $1,630 640 $990 LOGIC COMPANY Comparative Balance Sheet December 31, 2022 and 2023 2022 $ 15,000 100 $ 14,900 9,000 $5,900 $ 600 2,000 500 300 $3,400 $ 2,500 500 $ 2,000 800 $ 1,200 2023 $ 12,000 16,500 8,500 24,000 $ 61,000 2022 $ 9,000 12,500 14,000 10,000 $ 45,500
CUTTERL WEL. Cash Accounts receivable Merchandise inventory. Prepaid expenses Total current assets Plant and equipment: Building (net) Land Total plant and equipment Total assets Current liabilities: Accounts payable Salaries payable Total current liabilities Liabilities Long-term liabilities: Mortgage note payable. Total liabilities Common stock Retained earnings Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Acid test ratio 2023 $ 12,000 16,500 8,500 24,000 $ 61,000 2022 $ 14,500 13,500 $ 28,000 $ 89,000 $ 13,000 7,000 $20,000 22,000 $ 42,000 $ 21,000 26,000 $ 47,000 $ 89,000 $9,000 12,500 14,000 10,000 $ 45,500 $ 11,000 9,000 $ 20,000 $ 65,500 $7,000 5,000 $ 12,000 Calculate the acid test ratio. Note: Do NOT enter your answer as a percentage (i.e., do not move the decimal two places to the right). Enter it as a proportion rounded to the nearest hundredth. 20,500 $ 32,500 $ 21,000 12,000 $ 33,000 $ 65,500
Transcribed Image Text:CUTTERL WEL. Cash Accounts receivable Merchandise inventory. Prepaid expenses Total current assets Plant and equipment: Building (net) Land Total plant and equipment Total assets Current liabilities: Accounts payable Salaries payable Total current liabilities Liabilities Long-term liabilities: Mortgage note payable. Total liabilities Common stock Retained earnings Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Acid test ratio 2023 $ 12,000 16,500 8,500 24,000 $ 61,000 2022 $ 14,500 13,500 $ 28,000 $ 89,000 $ 13,000 7,000 $20,000 22,000 $ 42,000 $ 21,000 26,000 $ 47,000 $ 89,000 $9,000 12,500 14,000 10,000 $ 45,500 $ 11,000 9,000 $ 20,000 $ 65,500 $7,000 5,000 $ 12,000 Calculate the acid test ratio. Note: Do NOT enter your answer as a percentage (i.e., do not move the decimal two places to the right). Enter it as a proportion rounded to the nearest hundredth. 20,500 $ 32,500 $ 21,000 12,000 $ 33,000 $ 65,500
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