Suppose the following financial data were reported by 3M Company for 2019 and 2020 (dollars in millions). 3M CompanyBalance Sheets (partial)     2020   2019 Current assets             Cash and cash equivalents   $3,200   $1,881     Accounts receivable, net   3,500   3,175     Inventories   2,702   3,044     Other current assets   1,896   1,582 Total current assets   $11,298   $9,682 Current liabilities   $4,791   $5,869   1.Calculate the current ratio and working capital for 3M for 2019 and 2020.   2.Suppose that at the end of 2020, 3M management used $198 million cash to pay off $198 million of accounts payable. How would its current ratio and working capital have changed?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
Practice Pack
Suppose the following financial data were reported by 3M Company for 2019 and 2020 (dollars in millions).

3M Company
Balance Sheets (partial)
   
2020
 
2019
Current assets        
    Cash and cash equivalents   $3,200   $1,881
    Accounts receivable, net   3,500   3,175
    Inventories   2,702   3,044
    Other current assets   1,896   1,582
Total current assets   $11,298   $9,682
Current liabilities   $4,791   $5,869
 
1.Calculate the current ratio and working capital for 3M for 2019 and 2020.
 
2.Suppose that at the end of 2020, 3M management used $198 million cash to pay off $198 million of accounts payable. How would its current ratio and working capital have changed?
Expert Solution
trending now

Trending now

This is a popular solution!

video

Learn your way

Includes step-by-step video

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Financial Statements
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
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education