Lily Company had the following account totals as of December 31, 20X2. Cost of goods sold Accounts receivable Rent revenue Accounts payable Sales Inventory Bank Loan Payable (*) Cash $150,000 100,000 10,000 25,000 200,000 50,000 20,000 18,000 Retained earnings (beginning of year, January 1, 20X2) 80,000 Prepaid insurance (6-month insurance policy) Paid-in capital 15,000 38,000 Equipment 45,000 Unearned rent revenue (9-month contract) 5,000 (*) of the $20,000 bank loan payable, $3,000 will be repaid in 20X3. What is Lily Company's current ratio? a. 5.74 b. 6.14 c. 4.06 d. 5.90 e. 5-55

Managerial Accounting: The Cornerstone of Business Decision-Making
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter15: Financial Statement Analysis
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Lily Company had the following account totals as of December 31, 20X2.
Cost of goods sold
Accounts receivable
Rent revenue
Accounts payable
Sales
Inventory
Bank Loan Payable (*)
Cash
$150,000
100,000
10,000
25,000
200,000
50,000
20,000
18,000
Retained earnings (beginning of year, January 1, 20X2) 80,000
Prepaid insurance (6-month insurance policy)
Paid-in capital
15,000
38,000
Equipment
45,000
Unearned rent revenue (9-month contract)
5,000
(*) of the $20,000 bank loan payable, $3,000 will be repaid in 20X3.
What is Lily Company's current ratio?
a. 5.74
b. 6.14
c. 4.06
d. 5.90
e. 5-55
Transcribed Image Text:Lily Company had the following account totals as of December 31, 20X2. Cost of goods sold Accounts receivable Rent revenue Accounts payable Sales Inventory Bank Loan Payable (*) Cash $150,000 100,000 10,000 25,000 200,000 50,000 20,000 18,000 Retained earnings (beginning of year, January 1, 20X2) 80,000 Prepaid insurance (6-month insurance policy) Paid-in capital 15,000 38,000 Equipment 45,000 Unearned rent revenue (9-month contract) 5,000 (*) of the $20,000 bank loan payable, $3,000 will be repaid in 20X3. What is Lily Company's current ratio? a. 5.74 b. 6.14 c. 4.06 d. 5.90 e. 5-55
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