Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 11, Problem 22E
Quick ratio
Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years:
- a. Determine the quick ratio for December 31 of both years.
- b.
Interpret the change in the quick ratio between the two balance sheet dates.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Vertical analysis compares each item on a financial statement with:
a corresponding item on a different statement of the same year.
B.
a total or key amount on the same statement.
an industry average.
a total or key amount on the financial statement of the previous period.
To calculate a year-to-year percentage change in any financial statement line item such as sales, you determine the current-year amount and prior-year amount and divide the difference by:
A) Total assets
B) Net income
C) The current year’s amount
D) The prior years amount
=
The current year financial statements for Blue Water Company and Prime Fish Company are presented below.
Prime Fish
Balance sheet
Cash
Accounts receivable (net)
Inventory
Property & equipment (net)
Other assets
Total assets
Current liabilities
Long-term debt (interest rate: 15%)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
Total liabilities and stockholders' equity
Income statement
Sales revenue (1/2 on credit)
Cost of goods sold
Operating expenses
Net income
Other data
Per share stock price at end of current year
Blue Water
$ 42,300
44,500
92,500
159,500
85,300
$ 424,100
$ 92,500
74,100
157,100
30,300
70,100
$ 424,100
$ 427,500
(234,500)
(163,600)
$ 29,400
$ 23.3
45%
$ 19,700
34,900
47,800
416,600
318,000
$ 34,300
$ 837,000
$ 68,500
62,600
525,000
107,300
73,600
$ 837,000
$ 789,000
(401,300)
(312,300)
$ 75,400
$28
45%
Average income tax rate
Dividends declared and paid in current year
Both companies are in the fish catching and manufacturing business.…
Chapter 11 Solutions
Financial Accounting
Ch. 11 - Does a discounted note payable provide credit...Ch. 11 - Employees are subject to taxes withheld from their...Ch. 11 - Prob. 3DQCh. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - When should the liability associated with a...Ch. 11 - Prob. 10DQ
Ch. 11 - On October 12, Belleville Co. borrowed cash from...Ch. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Prob. 2PEACh. 11 - Prob. 2PEBCh. 11 - Prob. 3PEACh. 11 - Prob. 3PEBCh. 11 - The payroll register of Konrath Co. indicates...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Prob. 5PEACh. 11 - Prob. 5PEBCh. 11 - Prob. 6PEACh. 11 - Prob. 6PEBCh. 11 - Prob. 7PEACh. 11 - Prob. 7PEBCh. 11 - Quick ratio Nabors Company reported the following...Ch. 11 - Quick ratio Adieu Company reported the following...Ch. 11 - Bon Nebo Co. sold 25,000 annual subscriptions of...Ch. 11 - Entries for notes payable Cosimo Enterprises...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - A business issued a 60-day note for 75,000 to a...Ch. 11 - On June 30, Collins Management Company purchased...Ch. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Summary payroll data In the following summary of...Ch. 11 - Prob. 11ECh. 11 - The payroll register for Proctor Company for the...Ch. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - A business provides its employees with varying...Ch. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Accrued product warranty General Motors...Ch. 11 - Prob. 21ECh. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - The current assets and current liabilities for...Ch. 11 - The following items were selected from among the...Ch. 11 - The following information about the payroll for...Ch. 11 - Prob. 3PACh. 11 - Prob. 4PACh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 1PBCh. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Jocame Inc. began business on January 2, 2015....Ch. 11 - Prob. 4PBCh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 3CPPCh. 11 - Tonya Latirno is a certified public accountant...Ch. 11 - Recognizing pension expense The annual examination...Ch. 11 - Prob. 3CPCh. 11 - Prob. 5CP
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
- The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: 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 conclusions can be drawn from these data as to the companys ability to meet its currently maturing debts?arrow_forwardCompute the following ratiosat December 31, 2019: i.Current ratio ii.Acid-test Ratio iii.Account Receivables Turnover iv.Average collection period v.Inventory Turnover vi.Days in inventory vii.Profit margin viii.Debts to Asset ratio ix.Return on Assets x.Times Interest Earnedarrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash $413,400 $330,400 371,700 Marketable securities 478,700 Accounts and notes receivable (net) 195,900 123,900 Inventories 1,481,000 1,007,700 Prepaid expenses 763,000 644,300 Total current assets $3,332,000 $2,478,000 Current liabilities: Accounts and notes payable (short-term) $394,400 $413,000 Accrued liabilities 285,600 177,000 $680,000 $590,000 Total current liabilities a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.arrow_forward
- Horizontal analysis is a technique for evaluating financial statement dataa. for one period of timeb. over a period of timec. on a certain dated. as it may appear in the futurearrow_forwardRequired: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Sales Current assets: Cash Accounts receivable, net Inventory Total current assets Current liabilities Year 1 % % % % % % Year 2 % % % % % % Year 3 % % % % % % Year 4 % % % % % Year 5 % % % % %arrow_forwardi need help with this current ratioarrow_forward
- In horizontal analysis, each item is expressed as a percentage of the a. latest year figure. b. net income figure. c. total assets. O d. earliest year figure.arrow_forwardRequired 1. Compute each year’s current ratio. Round ratios to one decimal. 2. Express the income statement data in common-size percents. Round percents to two decimals. 3. Express the balance sheet data in trend percents with 2017 as the base year. Round percents to two decimals. Analysis Component 4. Comment on any significant relations revealed by the ratios and percents computed.arrow_forwardplease step by step solution.arrow_forward
- The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash Marketable securities Accounts and notes receivable (net) Inventories Prepaid expenses Total current assets Current liabilities: Accounts and notes payable (short-term) Accrued liabilities Total current liabilities. $620,500 718,500 294,000 749,800 386,200 $2,769,000 1. Working capital 2. Current ratio 3. Quick ratio b. The liquidity of Albertini has in current assets relative to current liabilities. $411,800 298,200 $710,000 $496,000 558,000 186,000 529,500 338,500 $2,108,000 $434,000 186,000 $620,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. Current Year Previous Year from the preceding year to the current year. The working capital, current ratio, and quick ratio have all Most of these changes are the result of anarrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years: Previous Year Current assets: Cash Marketable securities Accounts and notes receivable (net) Inventories Prepaid expenses. Total current assets. Current liabilities: Accounts and notes payable (short-term) Accrued liabilities Total current liabilities 1. Working capital 2. Current ratio: Current Year 3. Quick ratio b. The liquidity of Albertini has $356,400 412,700 168,900 1,547,700 797,300 $3,283,000 $388,600 281,400 $670,000 $278,400 313,200 104,400 1,167,500 746,500 $2,610,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. Current Year Previous Year $406,000 174,000 $580,000 from the preceding year to the current year. The working capital, current ratio, and quick ratio have all in current assets relative to current liabilities. Most of these changes are the…arrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current assets: Cash Marketable securities Accounts and notes receivable (net) Inventories Prepaid expenses Total current assets Current liabilities: Accounts and notes payable (short-term) Accrued liabilities Total current liabilities Current Year $389,100 450,600 184,300 1,098,200 565,800 $2,688,000 $371,200 268,800 $640,000 Previous Year $291,200 327,600 109,200 854,000 546,000 $2,128,000 $392,000 168,000 $560,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License