The following data represent selected information from the comparative income statement and balance sheet for Little CPA Company for the years ended December 31, 2020 and 2019: 2020 2019 Net Sales (all on credit) P370,000 P333,000 Cost of goods sold 160,000 150,000 Gross profit 210,000 183,000 Income from operations 95,000 87,000 Interest expense 8,000 8,000 Net income 70,000 57,000 Cash 10,000 14,000 Accounts receivable, net 30,000 25,000 Inventory 43,000 40,000 Prepaid expenses 5,000 7,000 Total current assets 88,000 86,000 Total noncurrent assets 112,000 104,000 Total current liabilities 70,000 60,000 Total noncurrent liabilities 40,000 45,000 Ordinary share capital, no par* 60,000 60,000 Retained earnings 30,000 25,000 Note: 10,000 ordinary shares have been issued and outstanding since the company was established. They had a market value of P90 per share at 12/31/20, and they were selling for P91.50 per share at 12/31/19. The acid-test ratio for Little CPA Company at 12/31/19 is:
Problem I. The following data represent selected information from the comparative income statement and
|
|
2020 |
2019 |
|
Net Sales (all on credit) |
P370,000 |
P333,000 |
|
Cost of goods sold |
160,000 |
150,000 |
|
Gross profit |
210,000 |
183,000 |
|
Income from operations |
95,000 |
87,000 |
|
Interest expense |
8,000 |
8,000 |
|
Net income |
70,000 |
57,000 |
|
Cash |
10,000 |
14,000 |
|
|
30,000 |
25,000 |
|
Inventory |
43,000 |
40,000 |
|
Prepaid expenses |
5,000 |
7,000 |
|
Total current assets |
88,000 |
86,000 |
|
Total noncurrent assets |
112,000 |
104,000 |
|
Total current liabilities |
70,000 |
60,000 |
|
Total noncurrent liabilities |
40,000 |
45,000 |
|
Ordinary share capital, no par* |
60,000 |
60,000 |
|
|
30,000 |
25,000 |
Note: 10,000 ordinary shares have been issued and outstanding since the company was established. They had a market value of P90 per share at 12/31/20, and they were selling for P91.50 per share at 12/31/19.
- The acid-test ratio for Little CPA Company at 12/31/19 is:
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