Effect of Transactions on Current Position Analysis Data pertaining to the current position of Lucroy Industries Inc. follows: Cash $800,000 Marketable securities 550,000 Accounts and notes receivable (net) 850,000 Inventories 700,000 Prepaid expenses 300,000 Accounts payable 1,200,000 Notes payable (short-term) 700,000 Accrued expenses 100,000 Required: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios to one decimal place. a. Working capital $ b. Current ratio c. Quick ratio
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Lucroy Industries Inc. follows: Cash $800,000 Marketable securities 550,000 Accounts and notes receivable (net) 850,000 Inventories 700,000 Prepaid expenses 300,000 Accounts payable 1,200,000 Notes payable (short-term) 700,000 Accrued expenses 100,000 Required: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios to one decimal place. a. Working capital $ b. Current ratio c. Quick ratio
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 4PA: Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall...
Related questions
Question
Practice Pack
Effect of Transactions on Current Position Analysis
Data pertaining to the current position of Lucroy Industries Inc. follows:
Cash | $800,000 |
Marketable securities | 550,000 |
Accounts and notes receivable (net) | 850,000 |
Inventories | 700,000 |
Prepaid expenses | 300,000 |
Accounts payable | 1,200,000 |
Notes payable (short-term) | 700,000 |
Accrued expenses | 100,000 |
Required:
1. Compute (a) the
a. Working capital | $ |
b. Current ratio | |
c. Quick ratio |
2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.
Transaction | Working Capital | Current Ratio | Quick Ratio | ||||||
a. Sold marketable securities at no gain or loss, $500,000. | $ | ||||||||
b. Paid accounts payable, $287,500. | $ | ||||||||
c. Purchased goods on account, $400,000. | $ | ||||||||
d. Paid notes payable, $125,000. | $ | ||||||||
e. Declared a cash dividend, $325,000. | $ | ||||||||
f. Declared a common stock dividend on common stock, $150,000. | $ | ||||||||
g. Borrowed cash from bank on a long-term note, $1,000,000. | $ | ||||||||
h. Received cash on account, $75,000. | $ | ||||||||
i. Issued additional shares of stock for cash, $2,000,000. | $ | ||||||||
j. Paid cash for prepaid expenses, $200,000. | $ |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Includes step-by-step video
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 5 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning