Selected data from the year-end financial statements of World Cup Corp. arepresented below. The difference between average and ending inventories isimmaterial. Current ratio 2.0 Quick ratio 1.5Current liabilitiesP 600,000 Inventory turnover (based on costof sales)8 timesGross profit margin 40%World’s net sales for the year werea. P 2.4 million.b. P 4.0 million.c. P 1.2 million.d. P 6.0 million

Working note: 1. Computation of current asset: Current ratio=Current assetsCurrent…

Answered: Selected data from the year-end…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Selected data from the year-end financial statements of World Cup Corp. are
presented below. The difference between average and ending inventories is
immaterial.

Current ratio	2.0
Quick ratio	1.5
Current liabilities	P 600,000
Inventory turnover (based on cost of sales)	8 times
Gross profit margin	40%

World’s net sales for the year were
a. P 2.4 million.
b. P 4.0 million.
c. P 1.2 million.
d. P 6.0 million

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