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Cash ... Accounts receivable, net 260,000 490,000 10,000 800,000 Inventory Prepaid expenses Plant and equipment, net Total assets .... $1,650,000

Cash ... Accounts receivable, net 260,000 490,000 10,000 800,000 Inventory Prepaid expenses Plant and equipment, net Total assets .... $1,650,000

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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Selected Financial Measures for Assessing Liquidity

Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 2.5 on June 30 of the current year. On that date, the company’s assets were:

Required:

1. What was the company’s working capital on Jure 30?

2. What was the company’s acid-test ratio on June 30?

3. The company paid an account payable of $40,000 immediately after June 30.

a. What effect did this transaction have on working capital? Show computations.

b. What effect did this transaction have on the current ratio? Show computations.

Cash ... Accounts receivable, net 260,000 490,000 10,000 800,000 Inventory Prepaid expenses Plant and equipment, net Total assets .... $1,650,000
Transcribed Image Text:Cash ... Accounts receivable, net 260,000 490,000 10,000 800,000 Inventory Prepaid expenses Plant and equipment, net Total assets .... $1,650,000
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