The following data were taken from the balance sheet of Mossberg Co. Dec. 31,2014 Dec. 31, 2013 Cash $700,000 $600,000 Marketable securities 800,000 620,000 Accounts and notes receivable (net) 920,000 780,000 Inventories 600,000 500,000 Prepaid expenses 500,000 500,000 --------------------- ------------------------- Total current assets $3,520,000 $3,000,000 ============== ================ Accounts and notes payable (short - term) $800,000 $750,000 Accrued liabilities 300,000 250,000 ---------------------------- ---------------------------- Total current liabilities $1,100,000 $1,000,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. b. What conclusion can be drawn from these data as to the company's ability to meet its currently maturing debts?
The following data were taken from the balance sheet of Mossberg Co. Dec. 31,2014 Dec. 31, 2013 Cash $700,000 $600,000 Marketable securities 800,000 620,000 Accounts and notes receivable (net) 920,000 780,000 Inventories 600,000 500,000 Prepaid expenses 500,000 500,000 --------------------- ------------------------- Total current assets $3,520,000 $3,000,000 ============== ================ Accounts and notes payable (short - term) $800,000 $750,000 Accrued liabilities 300,000 250,000 ---------------------------- ---------------------------- Total current liabilities $1,100,000 $1,000,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. b. What conclusion can be drawn from these data as to the company's ability to meet its currently maturing debts?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following data were taken from the
| Dec. 31,2014 | Dec. 31, 2013 | |
|---|---|---|
| Cash | $700,000 | $600,000 |
| Marketable securities | 800,000 | 620,000 |
| Accounts and notes receivable (net) | 920,000 | 780,000 |
| Inventories | 600,000 | 500,000 |
| Prepaid expenses | 500,000 | 500,000 |
| --------------------- | ------------------------- | |
| Total current assets | $3,520,000 | $3,000,000 |
| ============== | ================ | |
| Accounts and notes payable (short - term) | $800,000 | $750,000 |
| Accrued liabilities | 300,000 | 250,000 |
| ---------------------------- | ---------------------------- | |
| Total current liabilities | $1,100,000 | $1,000,000 |
a. Determine for each year (1) the
b. What conclusion can be drawn from these data as to the company's ability to meet its currently maturing debts?
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