Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 4 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 Total assets Required: $ 68,000 420,000 680,000 9,000 1,890,000 $ 3,067,000 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 $46,000 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? (Round your Intermediate calculations to 1 decimal place.) 1. Working capital 2. Acid-test ratio 3a. Effect on working capital 3b. Effect on current ratio
Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 4 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 Total assets Required: $ 68,000 420,000 680,000 9,000 1,890,000 $ 3,067,000 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 $46,000 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? (Round your Intermediate calculations to 1 decimal place.) 1. Working capital 2. Acid-test ratio 3a. Effect on working capital 3b. Effect on current ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 4 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
Total assets
Required:
$ 68,000
420,000
680,000
9,000
1,890,000
$ 3,067,000
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 $46,000 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? (Round your Intermediate calculations to 1 decimal place.)
1. Working capital
2. Acid-test ratio
3a. Effect on working capital
3b. Effect on current ratio
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