Following are the current asset and current liability sections of the balance sheets for Freedom Inc. at January 31, 2020 and 2019 (in millions): January 31, 2020January 31, 2019Current Assets Cash $11 $8 Accounts receivable 6 9 Inventories 7 11 Total current assets $24 $28 Current Liabilities Note payable $6 $6 Accounts payable 6 3 Other accrued liabilities 5 5 Total current liabilities $17 $14 Required:a. Calculate the working capital and current ratio at each balance sheet date. (Enter "Working capital" in millions of dollars (i.e., 10,000,000 should be entered as 10). Round your "Current ratio" to 2 decimal places.)

Working capital = Total current assets - Total current liabilities

Answered: working capital and current ratio

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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Following are the current asset and current liability sections of the balance sheets for Freedom Inc. at January 31, 2020 and 2019 (in millions):

	January 31, 2020	January 31, 2019
Current Assets
Cash		$	11	$	8
Accounts receivable			6		9
Inventories			7		11
Total current assets		$	24	$	28
Current Liabilities
Note payable		$	6	$	6
Accounts payable			6		3
Other accrued liabilities			5		5
Total current liabilities		$	17	$	14

Required:
a. Calculate the working capital and current ratio at each balance sheet date. (Enter "Working capital" in millions of dollars (i.e., 10,000,000 should be entered as 10). Round your "Current ratio" to 2 decimal places.)

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