Excerpts from Candle Corporation's most recent balance sheet (in thousands of dollars) appear below: Year 2 Year 1 Current assets: Cash $162 $100 Accounts receivable, net Inventory Prepaid expenses 192 192 142 132 92 92 Total current assets $588 $516 Current liabilities: Accounts payable Accrued liabilities $202 $182 32 32 Notes payable, short term 92 82 Total current liabilities $326 $296 Sales on account during the year totaled $1,210 thousand. Cost of goods sold was $810 thousand. Requlred: Compute the following for Year 2: a. Working capital. (Enter your answer In thousands of dollars, I.e., 100,000 should be entered as 100.) b. Current ratio. (Round your answer to 2 decimal places.) C. Acid-test (quick) ratio. (Round your answer to 2 decimal places.) d. Accounts recelvable turnover. (Round your answer to 2 decimal places.) e. Average collection perlod. (Use 365 days In a year. Round your Intermedlate calculatlons to 2 decimals places and your fina answer to 1 decimal place.) f. Inventory turnover. (Round your answer to 2 decimal places.) g. Average sale period. (Use 365 days In a year. Round your Intermedlate calculatlons to 2 decimals places and your final ans to 1 decimal place.) a. Working capital b. Current ratio c. Acid-test ratio d. Accounts receivable turnover e. Average collection period days f. Inventory turnover g. Average sale period days
Excerpts from Candle Corporation's most recent balance sheet (in thousands of dollars) appear below: Year 2 Year 1 Current assets: Cash $162 $100 Accounts receivable, net Inventory Prepaid expenses 192 192 142 132 92 92 Total current assets $588 $516 Current liabilities: Accounts payable Accrued liabilities $202 $182 32 32 Notes payable, short term 92 82 Total current liabilities $326 $296 Sales on account during the year totaled $1,210 thousand. Cost of goods sold was $810 thousand. Requlred: Compute the following for Year 2: a. Working capital. (Enter your answer In thousands of dollars, I.e., 100,000 should be entered as 100.) b. Current ratio. (Round your answer to 2 decimal places.) C. Acid-test (quick) ratio. (Round your answer to 2 decimal places.) d. Accounts recelvable turnover. (Round your answer to 2 decimal places.) e. Average collection perlod. (Use 365 days In a year. Round your Intermedlate calculatlons to 2 decimals places and your fina answer to 1 decimal place.) f. Inventory turnover. (Round your answer to 2 decimal places.) g. Average sale period. (Use 365 days In a year. Round your Intermedlate calculatlons to 2 decimals places and your final ans to 1 decimal place.) a. Working capital b. Current ratio c. Acid-test ratio d. Accounts receivable turnover e. Average collection period days f. Inventory turnover g. Average sale period days
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Excerpts from Candle Corporation's Most Recent Balance Sheet**
The table below presents excerpts from the balance sheet of Candle Corporation, with figures in thousands of dollars.
**Balance Sheet**
*Current Assets:*
- Cash: Year 2 - $162, Year 1 - $100
- Accounts Receivable, Net: Year 2 - $192, Year 1 - $132
- Inventory: Year 2 - $142, Year 1 - $132
- Prepaid Expenses: Year 2 - $92, Year 1 - $92
**Total Current Assets:**
- Year 2 - $588
- Year 1 - $516
*Current Liabilities:*
- Accounts Payable: Year 2 - $202, Year 1 - $182
- Accrued Liabilities: Year 2 - $32, Year 1 - $32
- Notes Payable, Short Term: Year 2 - $92, Year 1 - $82
**Total Current Liabilities:**
- Year 2 - $326
- Year 1 - $296
Sales on account during the year were $1,210 thousand, and the cost of goods sold was $810 thousand.
**Required Calculations for Year 2:**
Compute the following financial metrics:
a. **Working Capital**: Enter your answer in thousands of dollars (e.g., $100,000 as 100).
b. **Current Ratio**: Round your answer to two decimal places.
c. **Acid-Test (Quick) Ratio**: Round your answer to two decimal places.
d. **Accounts Receivable Turnover**: Round to two decimal places.
e. **Average Collection Period**: Use 365 days in a year. Round intermediate calculations to two decimal places and the final answer to one decimal place.
f. **Inventory Turnover**: Round to two decimal places.
g. **Average Sale Period**: Use 365 days in a year. Round intermediate calculations to two decimal places and the final answer to one decimal place.
**Table for Calculations:**
The table provided is for entering the calculated values for the following:
- Working capital
- Current ratio
- Acid-test ratio
- Accounts receivable turnover
- Average collection period (days)
- Inventory turnover
- Average sale period (days)
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