Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years: Previous Year Current Year Current assets: $ 486,000 $ 500,000 Cash Accounts receivable 210,000 200,000 Inventory Total current assets 375,000 350,000 $1,071,000 $1,050,000 Current liabilities: $ 145,000 $ 110,000 Current portion of long-term debt Accounts payable 175,000 150,000 Accrued and other current liabilities 260,000 240,000 $ 580,000 $ 500,000 Total current liabilities a. Determine the quick ratio for December 31 of both years. b. Interpret the change in the quick ratio between the two balance sheet dates.
Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years: Previous Year Current Year Current assets: $ 486,000 $ 500,000 Cash Accounts receivable 210,000 200,000 Inventory Total current assets 375,000 350,000 $1,071,000 $1,050,000 Current liabilities: $ 145,000 $ 110,000 Current portion of long-term debt Accounts payable 175,000 150,000 Accrued and other current liabilities 260,000 240,000 $ 580,000 $ 500,000 Total current liabilities a. Determine the quick ratio for December 31 of both years. b. Interpret the change in the quick ratio between the two balance sheet dates.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years:
Previous Year
Current Year
Current assets:
$ 486,000
$ 500,000
Cash
Accounts receivable
210,000
200,000
Inventory
Total current assets
375,000
350,000
$1,071,000
$1,050,000
Current liabilities:
$ 145,000
$ 110,000
Current portion of long-term debt
Accounts payable
175,000
150,000
Accrued and other current liabilities
260,000
240,000
$ 580,000
$ 500,000
Total current liabilities
a. Determine the quick ratio for December 31 of both years.
b.
Interpret the change in the quick ratio between the two balance sheet dates.
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