Markus Company’s common stock sold for $1.75 per share at the end of this year. The company paid a common stock dividend of $0.42 per share this year. It also provided the following data excerpts from this year’s financial statements: Ending Balance Beginning Balance Cash $ 27,000 $ 43,800 Accounts receivable $ 48,000 $ 41,300 Inventory $ 45,100 $ 48,000 Current assets $ 120,100 $ 133,100 Total assets $ 312,000 $ 263,800 Current liabilities $ 49,500 $ 34,500 Total liabilities $ 82,000 $ 73,800 Common stock, $1 par value $ 105,000 $ 105,000 Total stockholders’ equity $ 230,000 $ 190,000 Total liabilities and stockholders’ equity $ 312,000 $ 263,800 This Year Sales (all on account) $ 580,000 Cost of goods sold $ 336,400 Gross margin $ 243,600 Net operating income $ 49,500 Interest expense $ 3,000 Net income $ 32,550 8. What is the acid-test ratio at the end of this year?
Markus Company’s common stock sold for $1.75 per share at the end of this year. The company paid a common stock dividend of $0.42 per share this year. It also provided the following data excerpts from this year’s financial statements: Ending Balance Beginning Balance Cash $ 27,000 $ 43,800 Accounts receivable $ 48,000 $ 41,300 Inventory $ 45,100 $ 48,000 Current assets $ 120,100 $ 133,100 Total assets $ 312,000 $ 263,800 Current liabilities $ 49,500 $ 34,500 Total liabilities $ 82,000 $ 73,800 Common stock, $1 par value $ 105,000 $ 105,000 Total stockholders’ equity $ 230,000 $ 190,000 Total liabilities and stockholders’ equity $ 312,000 $ 263,800 This Year Sales (all on account) $ 580,000 Cost of goods sold $ 336,400 Gross margin $ 243,600 Net operating income $ 49,500 Interest expense $ 3,000 Net income $ 32,550 8. What is the acid-test ratio at the end of this year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Markus Company’s common stock sold for $1.75 per share at the end of this year. The company paid a common stock dividend of $0.42 per share this year. It also provided the following data excerpts from this year’s financial statements:
Ending Balance | Beginning Balance | |
---|---|---|
Cash | $ 27,000 | $ 43,800 |
$ 48,000 | $ 41,300 | |
Inventory | $ 45,100 | $ 48,000 |
Current assets | $ 120,100 | $ 133,100 |
Total assets | $ 312,000 | $ 263,800 |
Current liabilities | $ 49,500 | $ 34,500 |
Total liabilities | $ 82,000 | $ 73,800 |
Common stock, $1 par value | $ 105,000 | $ 105,000 |
Total |
$ 230,000 | $ 190,000 |
Total liabilities and stockholders’ equity | $ 312,000 | $ 263,800 |
This Year | |
---|---|
Sales (all on account) | $ 580,000 |
Cost of goods sold | $ 336,400 |
Gross margin | $ 243,600 |
Net operating income | $ 49,500 |
Interest expense | $ 3,000 |
Net income | $ 32,550 |
8. What is the acid-test ratio at the end of this year?
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