E10.18 (LO 5), AN Suppose the following financial data were reported by 3M Company for 2021 and 2022 (dollars in millions).3M CompanyBalance Sheets (partial) 20222021Current assets Cash and cash equivalents$ 3,040$1,849Accounts receivable, net3,2503,195Inventories2,6393,013Other current assets1,8661,541Total current assets$10,795$9,598Current liabilities$ 4,897$5,839InstructionsCalculate the current ratio and working capital for 3M for 2021 and 2022.Suppose that at the end of 2022, 3M management used $300 million cash to pay off $300 million of accounts payable. How would its current ratio and working capital have changed? E10.1811(a)Current ratio:122021:132022:1415Working capital:162021:2022:1819(b)Current ratio:1011Working capital:121314 E10.18 (LO 5), AN Suppose the following financial data were reported by 3M Company for 2021 and 2022 (dollars in millions).зМ CompanyBalance Sheets (partial)20222021Current assetsCash and cash equivalents$ 3,040$1,849Accounts receivable, net3,2503,195Inventories2,6393,013Other current assets1,8661,541Total current assets$9,598$10,795$ 4,897Current liabilities$5,839Instructionsa. Calculate the current ratio and working capital for 3M for 2021 and 2022.b. Suppose that at the end of 2022, 3M management used $300 million cash to pay off $300 million of accounts payable. How would its current ratio and workingcapital have changed?

Name: E10.18 (LO 5), AN Suppose the following financial data were reported b
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Description: E10.18 (LO 5), AN Suppose the following financial data were reported by 3M Company for 2021 and 2022 (dollars in millions).3M CompanyBalance Sheets (partial) 20222021Current assets Cash and cash equivalents$ 3,040$1,849Accounts receivable, net3,2503

Current ratio and Working capital are computed; so that, liquidity position of a company could be…

Answered: Suppose the following financial data…

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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E10.18 (LO 5), AN Suppose the following financial data were reported by 3M Company for 2021 and 2022 (dollars in millions).

3M Company Balance Sheets (partial)
	2022	2021
Current assets
Cash and cash equivalents	$ 3,040	$1,849
Accounts receivable, net	3,250	3,195
Inventories	2,639	3,013
Other current assets	1,866	1,541
Total current assets	$10,795	$9,598
Current liabilities	$ 4,897	$5,839

Instructions

Calculate the current ratio and working capital for 3M for 2021 and 2022.
Suppose that at the end of 2022, 3M management used $300 million cash to pay off $300 million of accounts payable. How would its current ratio and working capital have changed?

E10.18
11
(a)
Current ratio:
12
2021:
13
2022:
14
15
Working capital:
16
2021:
2022:
18
19
(b)
Current ratio:
10
11
Working capital:
12
13
14

E10.18 (LO 5), AN Suppose the following financial data were reported by 3M Company for 2021 and 2022 (dollars in millions).
зМ Company
Balance Sheets (partial)
2022
2021
Current assets
Cash and cash equivalents
$ 3,040
$1,849
Accounts receivable, net
3,250
3,195
Inventories
2,639
3,013
Other current assets
1,866
1,541
Total current assets
$9,598
$10,795
$ 4,897
Current liabilities
$5,839
Instructions
a. Calculate the current ratio and working capital for 3M for 2021 and 2022.
b. Suppose that at the end of 2022, 3M management used $300 million cash to pay off $300 million of accounts payable. How would its current ratio and working
capital have changed?

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