Sh19 Mixon Company's year-end balance sheets show the following:CashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsAccounts payableLong-term notes payable securedby mortgages on plant assetsCommon stock, $10 par valueRetained earningsTotal liabilities and equity2006$30,80088,500111,5009,700277,500$518,000$128,90097,500162,500129,100$518,0002005$ 35,62562,50082,5009,375255,000$445,000$ 75,2502004$36,80049,20053,0004,000229,500$372,500$ 49,250102,50082,500162,500162,500104,75078,250$445,000 $372,500Required:Compare the year-end short-term liquidity position of this company at the end of 2006, 2005,and 2004 by computing the: (a) current ratio and (b) acid-test ratio. Comment on the ratioresults.

Name: Sh19 Mixon Company's year-end balance sheets show the following:CashAc
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Description: Sh19 Mixon Company's year-end balance sheets show the following:CashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsAccounts payableLong-term notes payable securedby mortgages on plant assetsCommon stock, $10

Lets understand the basics. Current ratio shows entity ability to pay its short term obligation…

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Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets .... .... Accounts payable.... Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 2006 2005 $ 30,800 $ 35,625 88,500 62,500 111,500 82,500 9,700 9,375 277,500 255,000 $518,000 $445,000 $128,900 $ 75,250 97,500 162,500 129,100 $518,000 2004 $36,800 49,200 53,000 4,000 229,500 $372,500 $ 49,250 102,500 82,500 162,500 162,500 104,750 78,250 $445,000 $372,500 equired: Compare the year-end short-term liquidity position of this company at the end of 2006, 2 nd 2004 by computing the: (a) current ratio and (b) acid-test ratio. Comment on the

Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets .... .... Accounts payable.... Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 2006 2005 $ 30,800 $ 35,625 88,500 62,500 111,500 82,500 9,700 9,375 277,500 255,000 $518,000 $445,000 $128,900 $ 75,250 97,500 162,500 129,100 $518,000 2004 $36,800 49,200 53,000 4,000 229,500 $372,500 $ 49,250 102,500 82,500 162,500 162,500 104,750 78,250 $445,000 $372,500 equired: Compare the year-end short-term liquidity position of this company at the end of 2006, 2 nd 2004 by computing the: (a) current ratio and (b) acid-test ratio. Comment on the

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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