How to find the current ratio? !Required informationP2-3 (Algo) Recording Transactions in T-Accounts, Preparing the Balance Sheet from a Trial Balance, andEvaluating the Current Ratio LO2-2, 2-4, 2-5[The following information applies to the questions displayed below.]Jaguar Plastics Company has been operating for three years. At December 31 of last year, the accounting recordsreflected the following:Cash$20,000 Accounts payable$19,000Investments (short-term)2,600Accounts receivable6,0003,300 Accrued liabilities payable3,600 Notes payable (current)25,000 Notes payable (noncurrent)1,500 Common stockInventory49,00010, 200Notes receivable (long-term)Equipment45,000 Additional paid-in capital97,000 Retained earnings4,80091,80021,600Factory buildingIntangiblesDuring the current year, the company had the following summarized activities:a. Purchased short-term investments for $8,800 cash.b. Lent $6,100 to a supplier who signed a two-year note.c. Purchased equipment that cost $22,000; paid $5,000 cash and signed a one-year note for the balance.d. Hired a new president at the end of the year. The contract was for $79,000 per year plus options to purchasecompany stock at a set price based on company performance. The new president begins her position on January 1of next year.e. Issued an additional 1,300 shares of $0.50 par value common stock for $12,000 cash.f. Borrowed $19,000 cash from a local bank, payable in three months.g. Purchased a patent (an intangible asset) for $1,700 cash.h. Built an addition to the factory for $27,000; paid $8,800 in cash and signed a three-year note for the balance.i. Returned defective equipment to the manufacturer, receiving a cash refund of $3,900.P2-3 Part 66. Compute the current ratio for the current year. (Round your answer to 2 decimal places.)Current ratio

The ability of a business to pay its short-term financial commitments that are due within a year is…

ecoral ansactio Ints, Preparing the ance She lai Balan ng the Current Ratio LO2-2, 2-4, 2-5 wing information applies to the questions displayed below.] astics Company has been operating for three years. At December 31 of last year, the accounting records the following: $20,000 Accounts payable $19,000 ents (short-term) receivable 2,600 6,000 3,300 Accrued liabilities payable 3,600 Notes payable (current) 25,000 Notes payable (noncurrent) 1,500 Common stock y 49,000 eceivable (long-term) 10, 200 nt 91,800 building ples 45,000 Additional paid-in capital 97,000 Retained earnings 4,800 21,600 e current year the company had the following summarized activities:

ecoral ansactio Ints, Preparing the ance She lai Balan ng the Current Ratio LO2-2, 2-4, 2-5 wing information applies to the questions displayed below.] astics Company has been operating for three years. At December 31 of last year, the accounting records the following: $20,000 Accounts payable $19,000 ents (short-term) receivable 2,600 6,000 3,300 Accrued liabilities payable 3,600 Notes payable (current) 25,000 Notes payable (noncurrent) 1,500 Common stock y 49,000 eceivable (long-term) 10, 200 nt 91,800 building ples 45,000 Additional paid-in capital 97,000 Retained earnings 4,800 21,600 e current year the company had the following summarized activities:

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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