The current asset section of Stibbe Pharmaceutical Company’s balance sheet included cash of $20,000 and accounts receivable of $40,000. The only other current asset is inventory. The company’s current ratio is 2.0 and its acid-test ratio is 1.5. Determine the ending balance in inventory and total current liabilities.

The current asset section of Stibbe Pharmaceutical Company’s balance sheet included cash of $20,000 and accounts receivable of $40,000. The only other current asset is inventory. The company’s current ratio is 2.0 and its acid-test ratio is 1.5. Determine the ending balance in inventory and total current liabilities.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

See similar textbooks

Related questions

Q: on a comparative balance sheet we have: inventory Prior year: 47 million Inventory current year:…

A: T-Account is also called the ledger.

Q: SCC Co. reported the following for the current year: net sales of $48,000; cost of goods sold of…

A: Inventory turnover = Cost of goods sold / Average inventory where, Average inventory = (Beginning…

Q: b. What was the invoice amount of the merchandise that was returned?

A: Net method -Under this method, the discount is deducted from the Sales Value and only net amount is…

Q: Current assets for Clarke Inc. totalled $1,037,400, the current ratio was 2.10, and the company uses…

A: Dividends do not affect current assets, but they decrease retained earnings, which is a part of…

Q: Consider the following company’s balance sheet and income statement. Number of days in inventory.…

A: Inventory days is the velocity of inventory. It shows the average number of days taken by business…

Q: Solve the problem with explanation

A: Average inventory = (156000 + 149000) /2 = 305000/2…

Q: During the prior year Company A had days payables outstanding of 27. As of the end of the current…

A: Accounts payable are those supplier accounts from whom business has made credit purchases and amount…

Q: The net income reported on the income statement for the current year was $122,100. Depreciation…

A: The question is based on the concept of Cash flow statement. Cash flow statement is the statement…

Q: Hot Pepper Company had the following information in its accounting records at year end: Inventory…

A: A formal account record called a journal entry is used in an organization's accounting system to…

Q: The current asset section of the Excalibur Tire Company’s balance sheet consists of cash, marketable…

A: Ratio analysis helps to analyze the financial statements of the company. Management can make…

Q: Kelton Inc. purchases inventory for $2,000 and incurs shipping costs of $100. To record this…

A: The expenses incurred for purchasing inventory are part of the inventory and they should be debited…

Q: Current assets for Clarke Inc. totalled $743,580, the current ratio was 1.80, and the company uses…

A: Dividends do not affect current assets, but they decrease retained earnings, which is a part of…

Q: categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling…

A: The closing entries are prepared to close the temporary accounts of the business that can not be…

Question

100%

Video Video

Expert Solution

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!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

Jones Corporation reported curent assets of $187,000 and current llabilities of $132,000 on Its most recent balance sheet. The current assets cons Accounts Receivable; and $79,000 of Inventory. The acid-test (quick) ratio Is: Multiple Cholce 0.60 : 1. 1.4:1. 1:1. 0.82:1. 0.58: 1.
Dungy Training Company has a current ratio of 0.70 to 1, based on current assets of $3.43 million and current liabilities of $4.90 million. How, if at all, will a $900,000 cash purchase of inventory affect the current ratio? How, if at all, will a $900,000 purchase of inventory on account affect the current ratio?
Blythe Industries reports the following account balances: inventory of $417,600, equipment of $2,028,300, accounts payable of $224,700, cash of $51,900, and accounts receivable of $313,900. What is the amount of the current assets? a. $46,700 b. $783,400 c. $56,000 d. $975,000 e. $699,700
The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: During the year, Arnn had net sales of 2.45 million. The cost of goods sold was 1.3 million. Required: Note: Round all answers to two decimal places. 1. Compute the current ratio. 2. Compute the quick or acid-test ratio. 3. Compute the accounts receivable turnover ratio. 4. Compute the accounts receivable turnover in days. 5. Compute the inventory turnover ratio. 6. Compute the inventory turnover in days.
Sheridan Industries has the following current assets and liabilities on the company's balance sheet: Cash $14080: Accounts Receivable $5600 Inventory $53000: Prepaid Rent $2900 Accounts Payable $19000 and Unearned Revenue $5000. The company's acid-test ratio would be O 101:1 O 122:1 0 032:1 Ⓒ 0.27:1
Jones Corp. reported current assets of $201,500 and current liablities of $143,000 on its most recent balance sheet. The currect assets consisted of $60,000 cash; $40,600 Accounts Recievable; and $100,900 if Inventory. The acid-test (quick) ratio is:
Cotuit company's current liabilities must be
The following information is shown in the accounting records of ToDas Company for the current year 2020. Balances as of Jan 1 Cash 620,000; Accounts receivable 670,000; Inventory 860,000; Accounts Payable 530,000. Balances as of Dec 31 Accounts receivable 900,000; Inventory 780,000; Accounts Payable 480,000. The total sales and cost of goods sold were P7,980,000 and P5,830,000, respectively. All sales and all merchandise purchases were made on credit. Various expenses of P1,070,000 were paid on cash. Assume that there were no other pertinent transactions. The cash balance on December 31, 2020
Sage Company has been operating for several years, and on December 31, 2020, presented the following balance sheet. Cash Receivables Inventory Plant assets (net) (a) (b) (c) (d) Current ratio SAGE COMPANY BALANCE SHEET DECEMBER 31, 2020 $42,200 Accounts payable 78,100 Mortgage payable Acid-test ratio 103,900 218,000 $442,200 The net income for 2020 was $24,800. Assume that total assets are the same in 2019 and 2020. (a) Compute each of the following ratios. (Round answers to 2 decimal places, e.g. 1.59 or 45.87%.) Debt to assets ratio Return on assets Common stock ($1 par) Retained earnings % $86,100 137,200 % 160,000 58,900 $442,200
The net income reported on the income statement for the current year was $361,300. Depreciation recorded on store equipment for the year amounted to $15,520. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $40,180 $40,070 Accounts receivable (net) 30,070 28,060 Merchandise inventory 40,390 45,420 Prepaid expenses 3,470 4,840 Accounts payable (merchandise creditors) 38,610 37,710 Wages payable 20,330 24,800 Required: A. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. B. Briefly explain why net cash flow from operating activities is different from net income.
Bronco Electronics' current assets consist of cash, short-term investments, accounts receivable, and inventory. The following data were abstracted from a recent financial statement: inventory $190,000 total assets 1,970,000 current ration 3.6 acid test ratio 2.35 debt to equity ratio 1.5 COMPUTE THE CURRENT ASSETS
Valenzuela, Incorporated, has a cash cycle of 41.5 days, an operating cycle of 59.3 days, and an inventory period of 25.6 days. The company reported cost of goods sold in the amount of $465,000, and credit sales were $749,000. What is the company's average balance in accounts payable and accounts receivable? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Average accounts payable Average accounts receivable