Problem 7 Comp WORKING CAPITAL, CURRENT RATIO, AND QUICK RATIO. Charles Corporation's balance sheet at December 31, 20X7, shows the following: Current assets $4.000 Cash 8.000 Marketable securities 100.000 Accounts receivable 120,000 Inventories 1.000 Prepaid expenses Total current assets S233.000 Current liabilities Notes payable $5.000 150.000 Accounts payable Accrued expenses 20.000 Income taxes payable 1.000 Total current liabilities $176.000 Long-term liabilities S340.000 Requirement: Determine the following: a. net working capital; b. current ratio; and c. quíck ratio.

Problem 7 Comp WORKING CAPITAL, CURRENT RATIO, AND QUICK RATIO. Charles Corporation's balance sheet at December 31, 20X7, shows the following: Current assets $4.000 Cash 8.000 Marketable securities 100.000 Accounts receivable 120,000 Inventories 1.000 Prepaid expenses Total current assets S233.000 Current liabilities Notes payable $5.000 150.000 Accounts payable Accrued expenses 20.000 Income taxes payable 1.000 Total current liabilities $176.000 Long-term liabilities S340.000 Requirement: Determine the following: a. net working capital; b. current ratio; and c. quíck ratio.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Category Prior Year Current Year Accounts payable 3,159.00 5,955.00 Accounts receivable 6,974.00…

A: Cash flow from operating says how much the company generated from its business activities.

Q: What is Ella Company’s debt ratio? a. 25.78% d. 137.78% b. 100.00% e. 34.74% c. 74.22%

A: Debt ratio is the proportion of total debts of a company to the total assets of the company. It…

Q: Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after…

A: The payout ratio is a financial metric that assesses the proportion of earnings a company…

Q: Current Position Analysis The following items are reported on a company's balance sheet: $150,600…

A: Current Ratio :— It is calculated by dividing current assets and current liabilities. Current Ratio…

Q: The comparative accounts payable and long-term debt balances for a company follow. Current Year…

A: Formula: Amount change = Current year - Previous year.

Q: Sove this Question please

Q: 1. Given the information provided by the financial statements, what would you tell Abrahams? (As…

A: Based on the information provided by the financial statements, there are a few things to consider…

Q: The following items are reported on a company's balance sheet: Cash $131,900 Marketable securities…

A: a) Current ratio is the ratio of financial measure which shows the ability of a company to pay its…

Q: The comparative partial balance sheets of Barry Company, for Years 1 below in condensed form. Year 2…

A: Barry Company Cash Flow Statement (Indirect Method) For the year ended December 31, Year 2…

Q: A9 i need all slution ....

A: The working capital is calculated as the difference between current assets and current liabilities.…

Q: JEY-7067 Inc. reported the following data for last year:

A: Residual Income = Net Operating Income - Average Operating Assets x Required Rate of return…

Q: Table 1 shows a balance sheet for a certain company. All quantities shown are in millions of…

A: Net working capital is that amount of capital which is being used in day to day normal operations in…

Q: Current ratio fill in the blank 1 b. Quick ratio

A: Current Ratio = Current Assets / Current Liability Liquid Ratio = Liquid Assets / Current…

Q: Category Prior Year Current Year Accounts payable 3,134.00 5,904.00 Accounts receivable 6,978.00…

A: Cash flow statement shows cash flows from three activities i.e. operating activities, investment…

Q: EXAMPLE 4: The capital employed in a business has been financed, as below: Equity Share Capital OMR…

A: Return on Capital employed shows the total of earnings that a firm generate from its invested…

Q: Category. Prior Year Current Yea Accounts payable 3,136.00 5,904.00 Accounts receivable 6,838.00…

A: Cash flow from investing activities repersent cash associated with purchase and sale of fixed…

Q: 12. Mara Inc. is a retail business with the following financial forecasts as well as the current…

A: Net Working Capital is the difference between the current Asset and current liabilities. A positive…

Q: The following balances and amounts were taken from the financial statements of Ortiz, Inc. Accounts…

A: Ratio analysis helps in getting inside review of an organisation.Debt to assets ratio is calculated…

Q: A-.Create the ratio of fixed assets to long-term liabilities B-. Create the ratio of liabilities to…

Q: The comparative accounts payable and long-term debt balances for a company follow. Current Year…

A: Under the comparitive analysis, the change in the balances is calculated in absolute and % terms. %…

Q: Consider the following balance sheet Expected Balance Sheet for XYZ Bank Assets Yield Liabilities…

A: Net interest margin- It is a measure of the interest income generated by the financial institutions…

Q: Category Prior year Current year Accounts payable 41,400 45,000 Accounts receivable 115,200 122,400…

A: Balance sheet shows the position of a firm. It is prepared at the year end and depicts the true and…

Q: Calculate the change in the company's net working capital between the years 20x8 and 20x9. Explain…

A: The net working capital refers to the difference between the current assets and liabilities of the…

Q: The company's acid-test ratio as of the balance sheet date is: * The following data is taken from…

A: Quick assets = Cash + Accounts receivable + Marketable securities = P85,000 + 110,000 + 250,000 =…

Q: Total Assets for a company are $700,000: Accounts Payable is $75,000 Bonds Payable is $225,000;…

A: A common size balance sheet expresses each asset, liability, and equity item as a percentage of…

Q: You have the following information for a firm: Cash $270,000 Patents $810,000 Accounts Payable…

A: The common stock account balance on the balance sheet refers to the book value of the common stock…

Question

Problem 7
NET WORKING CAPITAL, CURRENT RATIO, AND QUICK RATIO. Charles
Corporation's balance sheet at December 31, 20X7, shows the following:
Current assets
$4.000
Cash
8.000
Marketable securities
100.000
Accounts receivable
120.000
Inventories
1.000
Prepaid expenses
Total current assets
S233.000
Current liabilities
Notes payable
$5.000
150.000
Accounts payable
Accrued expenses
20.000
Income taxes payable
1.000
Total current liabilities
$176.000
Long-term liabilities
S340.000
Requirement:
Determine the following: a. net working capital; b. current ratio; and c. qguick ratio.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 6 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

5
Current Position Analysis The following items are reported on a company's balance sheet: Cash $537,500 Marketable securities 419,900 Accounts receivable (net) 334,600 Inventory 387,600 Accounts payable 646,000 Determine (a) the current ratio and (b) the quick ratio. Round your answers to one decimal place. a. Current ratio fill in the blank 1 b. Quick ratio
Prior Year Current Year Accounts payable 3,153.00 5,915.00 Accounts receivable 6,935.00 9,046.00 Accruals 5,794.00 6,085.00 Additional paid in capital 19,655.00 13,876.00 Cash. ??? ??? Common Stock 2,850 2,850 COGS 22,169.00 18,794.00 Current portion long-term debt 500 500 Depreciation expense 1,016.00 1,037.00 Interest expense 1,276.00 1,138.00 Inventories 3,041.00 6,672.00 Long-term debt 16,904.00 22,546.00 Net fixed assets 75,987.00 73,861.00 Notes payable 4,002.00 6,534.00 Operating expenses (excl. depr.) 19,950 20,000 Retained earnings 35,536.00 34,724.00 Sales 46,360 45,799.00 Taxes 350 920 Category ww What is the firm's total change in cash from the prior year to the current year?
Given the information below, calculate the Working Capital and Current Ratio 1 Cash and marketable securities - $3,500,000 2 Accounts Receivable (Gross) - $2,000,000 Allowance for doubtful accounts 2.5% 3 Accounts Payable - $2,500,000 4 Accumulated Depreciation 2,500,000 6 Inventory - $3,500,000 7 Other Current Assets - $1,000,000 8 Common Stock at Par Value - $100,000 9 Current portion of long term notes - $1,000,000 10 Other Current Liabilities - $1,950,000 11 Goodwill - $10,000,000 12 Long-Term debt - $10,000,000
Problem 4-15 Lloyd Inc. has sales of $200,000, a net income of $15,000, and the following balance sheet: ASSETS Cash Receivables Inventories Total Current assets Net fixed assets Total assets AMOUNT LIABILITIES & EQUITY $10,000 Accounts Payables 50,000 Notes Payable to bank 150,000 Total current liabilities $210,000 Long-term debt 90,000 Common Equity $300,000 Total Liabilities and Equity AMOUNT $30,000 20,000 $50,000 50,000 200,000 $300,000 The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.53, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.53), if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? What will be the firm's new quick ratio? Problem 4-1 Baxley Brothers has a DSO of 23 days, and its annual sales are…
jitu
Miracle Bank's balance sheet is the following. Assets Reserves Loans Short-term securities a. 70 Miracle Bank's leverage ratio is Ob. 0.0857 c. 8.57 Miracle Bank Od. 80 Liabilities & Owners' Equity $600 Deposits 6,400 Debt 1000 Capital (owners' equity) $7,000 990 10
Current Position Analysis The following items are reported on a company's balance sheet: Cash $423,700 Marketable securities 331,000 Accounts receivable (net) 304,500 Inventory 264,800 Accounts payable 662,000 Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place. a. Current ratio fill in the blank 1 b. Quick ratio fill in the blank 2
acccounting The following items are reported on a company’s balance sheet: Cash $120,000 Marketable securities 40,000 Accounts receivable (net) 50,000 Inventory 90,000 Accounts payable 150,000 Determine (a) the current ratio and (b) the quick ratio. Round your answers to one decimal place. a. Current ratio fill in the blank 1 b. Quick ratio fill in the blank 2
Cash $ 30,000 Marketable securities $ 25,000 Accounts Receivable Inventory Total current Assets Net Fixed Assets Total Assets Accounts Payable $ 120,000 Short-term Notes Payable Accrued Liabilities $ 20,000 Total Current Liabilities Long-Term Debt Total Debt Stockholder's Equity $ 600,000 Total Liabilites and Equity Assumptions: Sales = $1,825,000 Gross profit margin = 30% Inventory Turnover = 7.0 365 days per year DSO = 40 days Current ratio = 1.40 Total Asset Turnover = 1.25 Complete the Balance Sheet below based on the given information
< The following items are reported on a company's balance sheet: $296,600 Marketable securities 185,000 Accounts receivable (net) 121,000 Inventory 127,000 Accounts payable 228,000 Determine (a) the current ratio and (b) the quick ratio. Round your answers to one decimal place. Cash a. Current ratio b. Quick ratio