Exercise 14-12 (Static) Selected Financial Measures for Assessing Liquidity [LO14-2] 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: Cash Accounts receivable, net Inventory Prepaid expenses Plant and equipment, net $ 90,000 260,000 490,000 10,000 800,000 $ 1,650,000 Total assets Required: 1. What was the company's working capital on June 30? 2. What was the company's acid-test ratio on June 30? (Round your answer to 2 decimal places.) 3. The company paid an account payable of $40,000 immediately after June 30. a. What effect did this transaction have on working capital? b. What effect did this transaction have on the current ratio? 1. Working capital 2. Acid-test ratio 3a. Effect on working capital 3b. Effect on current ratio
Exercise 14-12 (Static) Selected Financial Measures for Assessing Liquidity [LO14-2] 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: Cash Accounts receivable, net Inventory Prepaid expenses Plant and equipment, net $ 90,000 260,000 490,000 10,000 800,000 $ 1,650,000 Total assets Required: 1. What was the company's working capital on June 30? 2. What was the company's acid-test ratio on June 30? (Round your answer to 2 decimal places.) 3. The company paid an account payable of $40,000 immediately after June 30. a. What effect did this transaction have on working capital? b. What effect did this transaction have on the current ratio? 1. Working capital 2. Acid-test ratio 3a. Effect on working capital 3b. Effect on current ratio
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Exercise 14-12 (Static) Selected Financial Measures for Assessing Liquidity [LO14-2]
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:
Cash
Accounts receivable, net
Inventory
Prepaid expenses
Plant and equipment, net
$ 90,000
260,000
490,000
10,000
800,000
Total assets
$ 1,650,000
Required:
1. What was the company's working capital on June 30?
2. What was the company's acid-test ratio on June 30? (Round your answer to 2 decimal places.)
3. The company paid an account payable of $40,000 immediately after June 30.
a. What effect did this transaction have on working capital?
b. What effect did this transaction have on the current ratio?
1. Working capital
2. Acid-test ratio
3a. Effect on working capital
3b. Effect on current ratio](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4c94f96-b456-4dc3-8b5a-0404c8f7cf3d%2Fa5c3524d-e7eb-4cac-b97a-cedce9979a58%2Fqb3rjzk_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 14-12 (Static) Selected Financial Measures for Assessing Liquidity [LO14-2]
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:
Cash
Accounts receivable, net
Inventory
Prepaid expenses
Plant and equipment, net
$ 90,000
260,000
490,000
10,000
800,000
Total assets
$ 1,650,000
Required:
1. What was the company's working capital on June 30?
2. What was the company's acid-test ratio on June 30? (Round your answer to 2 decimal places.)
3. The company paid an account payable of $40,000 immediately after June 30.
a. What effect did this transaction have on working capital?
b. What effect did this transaction have on the current ratio?
1. Working capital
2. Acid-test ratio
3a. Effect on working capital
3b. Effect on current ratio
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