Requirement 1. Compute the company's (a) quick (acid-test) ratio and (b) days' sales outstanding for 2021. Evaluate value as strong or weak. All sales are on account with terms of net 30 days. (a) Enter the formula and calculate the quick (acid-test) ratio for 2021. (Abbreviation used: Cash* = Cash and cash eq Round your final answer to two decimal places.) Cash*+Short-term investments + Net current receivables $ + Total current liabilities = + $ = Quick (acid-te
Requirement 1. Compute the company's (a) quick (acid-test) ratio and (b) days' sales outstanding for 2021. Evaluate value as strong or weak. All sales are on account with terms of net 30 days. (a) Enter the formula and calculate the quick (acid-test) ratio for 2021. (Abbreviation used: Cash* = Cash and cash eq Round your final answer to two decimal places.) Cash*+Short-term investments + Net current receivables $ + Total current liabilities = + $ = Quick (acid-te
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 9EA: Using the following select financial statement information from Black Water Industries, compute the...
Related questions
Question
![Seminole Corporation reported the following items at December 31, 2021, and 2020:
(Click the icon to view the comparative financial information.)
Read the requirements.
Requirement 1. Compute the company's (a) quick (acid-test) ratio and (b) days' sales outstanding for 2021. Evaluate each ratio
value as strong or weak. All sales are on account with terms of net 30 days.
(a) Enter the formula and calculate the quick (acid-test) ratio for 2021. (Abbreviation used: Cash* = Cash and cash equivalents.
Round your final answer to two decimal places.)
Cash* + Short-term investments + Net current receivables + Total current liabilities = Quick (acid-test) ratio
$
Seminole's quick (acid-test) ratio is considered fairly weak.
(b) Select the formula and calculate Seminole's days' sales outstanding for 2021. (Round interim calculations to two decimal
places, XX.XX. Round the days' sales outstanding up to the next whole day.)
Accounts receivable turnover =
+
Days' sales outstanding
Seminole's days' sales outstanding is within acceptable range relative to credit terms of net 30 days.
Requirement 2. Recommend two ways for Seminole to speed up its cash flow from receivables.
Seminole could speed up cash flows from receivables by offering discounts for early payments
or increasing penalties for late payments](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3bc6f2c3-c61f-4551-9d86-6484e6a495dc%2Ff64a7d4b-5709-4898-8b2c-74eea2506177%2Fpl8hshk_processed.png&w=3840&q=75)
Transcribed Image Text:Seminole Corporation reported the following items at December 31, 2021, and 2020:
(Click the icon to view the comparative financial information.)
Read the requirements.
Requirement 1. Compute the company's (a) quick (acid-test) ratio and (b) days' sales outstanding for 2021. Evaluate each ratio
value as strong or weak. All sales are on account with terms of net 30 days.
(a) Enter the formula and calculate the quick (acid-test) ratio for 2021. (Abbreviation used: Cash* = Cash and cash equivalents.
Round your final answer to two decimal places.)
Cash* + Short-term investments + Net current receivables + Total current liabilities = Quick (acid-test) ratio
$
Seminole's quick (acid-test) ratio is considered fairly weak.
(b) Select the formula and calculate Seminole's days' sales outstanding for 2021. (Round interim calculations to two decimal
places, XX.XX. Round the days' sales outstanding up to the next whole day.)
Accounts receivable turnover =
+
Days' sales outstanding
Seminole's days' sales outstanding is within acceptable range relative to credit terms of net 30 days.
Requirement 2. Recommend two ways for Seminole to speed up its cash flow from receivables.
Seminole could speed up cash flows from receivables by offering discounts for early payments
or increasing penalties for late payments
![Data table
Current assets:
Cash
Marketable securities
Accounts receivable, net
Inventory
Other current assets
Long-term assets
Total assets
Income Statement
(partial):
Sales revenue
Balance Sheets (Summarized)
Year End
2021
$ 15,000 $
23,000
60,000
196,000
5,000
2020
2021
$938.000
Current liabilities:
11,000
12,000
74,000 Long-term liabilities
192,000
5,000
10,000
$299,000 $ 304,000
Accounts payable
Other current liabilities
Stockholders' equity
Year End
2021
$ 18,000 $
108,000
20,000
2020
19,500
110,000
21,000
153,000 153,500
Total liabilities and equity $299,000 $ 304,000
X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3bc6f2c3-c61f-4551-9d86-6484e6a495dc%2Ff64a7d4b-5709-4898-8b2c-74eea2506177%2F8buw6cq_processed.png&w=3840&q=75)
Transcribed Image Text:Data table
Current assets:
Cash
Marketable securities
Accounts receivable, net
Inventory
Other current assets
Long-term assets
Total assets
Income Statement
(partial):
Sales revenue
Balance Sheets (Summarized)
Year End
2021
$ 15,000 $
23,000
60,000
196,000
5,000
2020
2021
$938.000
Current liabilities:
11,000
12,000
74,000 Long-term liabilities
192,000
5,000
10,000
$299,000 $ 304,000
Accounts payable
Other current liabilities
Stockholders' equity
Year End
2021
$ 18,000 $
108,000
20,000
2020
19,500
110,000
21,000
153,000 153,500
Total liabilities and equity $299,000 $ 304,000
X
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
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!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
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.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College