The condensed balance sheet and income statement for Marjoram Company are presented below.MARJORAM COMPANYBalance SheetDecember 31, 2024Cash$ 19,000Notes receivable (due August 15, 2025)35,000Accounts receivable (net)48,400Inventory70,600Property, plant, and equipment (net)250,000Intangible assets12,400Total assets$ 435,400Current liabilities$ 108,400Bonds payable (11%) (long-term)100,000Common stock70,000Retained earnings157,000Total liabilities and equity$ 435,400MARJORAM COMPANYIncome StatementFor the Year ended December 31, 2024Sales$ 704,000Cost of goods sold422,400Gross profit$ 281,600Operating expenses166,200Operating income$ 115,400Interest expense11,000Income before income tax$ 104,400Income tax expense31,320Net income$ 73,080Required:Compute the current ratio for Marjoram Company.Note: Round your answer to 2 decimal places.

The ratio analysis helps to analyze the financial statements of the business on the basis of the…

Answered: The condensed balance sheet and income…

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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The condensed balance sheet and income statement for Marjoram Company are presented below.

MARJORAM COMPANY
Balance Sheet
December 31, 2024
Cash	$ 19,000
Notes receivable (due August 15, 2025)	35,000
Accounts receivable (net)	48,400
Inventory	70,600
Property, plant, and equipment (net)	250,000
Intangible assets	12,400
Total assets	$ 435,400
Current liabilities	$ 108,400
Bonds payable (11%) (long-term)	100,000
Common stock	70,000
Retained earnings	157,000
Total liabilities and equity	$ 435,400

MARJORAM COMPANY
Income Statement
For the Year ended December 31, 2024
Sales	$ 704,000
Cost of goods sold	422,400
Gross profit	$ 281,600
Operating expenses	166,200
Operating income	$ 115,400
Interest expense	11,000
Income before income tax	$ 104,400
Income tax expense	31,320
Net income	$ 73,080

Required:

Compute the current ratio for Marjoram Company.

Note: Round your answer to 2 decimal places.

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