Nova Frame Fabricators has a quick ratio of 2.5 to 1 and current liabilities of $40,000. The company also reports noncurrent assets of $120,000. If Nova Frame's current ratio is 3.0 to 1, what must be the value of its inventory and prepaid expenses?

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter6: Merchandising Transactions
Section: Chapter Questions
Problem 19Q: The following is select account information for Sunrise Motors. Sales: $256,400; Sales Returns and...
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Nova Frame Fabricators has a quick ratio of 2.5 to 1 and current
liabilities of $40,000. The company also reports noncurrent
assets of $120,000. If Nova Frame's current ratio is 3.0 to 1,
what must be the value of its inventory and prepaid expenses?
Transcribed Image Text:Nova Frame Fabricators has a quick ratio of 2.5 to 1 and current liabilities of $40,000. The company also reports noncurrent assets of $120,000. If Nova Frame's current ratio is 3.0 to 1, what must be the value of its inventory and prepaid expenses?
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