Current Ratio : A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets. Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

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Chapter 14, Problem 9Q

To determine

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

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The predetermined overhead rate for Bright Co. is $12, which includes a variable overhead rate of $8 and a fixed overhead rate of $4. The budgeted overhead costs at a normal capacity of 50,000 direct labor hours were divided by the normal capacity of 50,000 hours to arrive at the predetermined overhead rate of $12. The actual overhead for August was $20,000 for variable costs and $15,000 for fixed costs. The standard hours allowed for the product produced in August were 4,000 hours. What is the total overhead variance? A. $20,000 U B. $21,000 F C. $13,000 U D. $23,000 F

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Question

Chapter 14, Problem 9Q

To determine

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 14, Problem 9Q

To determine

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 14, Problem 9Q

To determine

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 14, Problem 9Q

To determine

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Answer 6

Chapter 14, Problem 9Q

To determine

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Answer 7

Chapter 14, Problem 9Q

To determine

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Answer 8

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Answer 11

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Current Ratio : A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets. Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Solution Summary: The author explains that a 2 to 1 current ratio is inadequate for companies to get credit at banks.

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Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Want to see the full answer?

Chapter 14 Solutions

Current Ratio : A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets. Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Solution Summary: The author explains that a 2 to 1 current ratio is inadequate for companies to get credit at banks.

Concept explainers

Videos

Current Ratio: A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets. Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?

Want to see the full answer?

Chapter 14 Solutions

Current Ratio:

A current ratio is comparison between the current assets and current liabilities of a company to determine its ability to payback its short term liabilities from the current assets.

Why a 2 to 1 current ratio is not adequate for a company get a line of credit at a bank?