Foundations of Business (MindTap Course List)
6th Edition
ISBN: 9781337386920
Author: William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher: Cengage Learning
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Chapter 15.8B, Problem 2CC
Summary Introduction
To determine: Explaining the calculation procedures and significance of return on sales, the current ratio and inventory turnover.
Introduction: The current ratio or financial ratio that measures an organization's capacity to pay off its present obligations with current assets. Administration and outside clients examine this ratio to evaluate the liquidity of the organization and additionally its proficiency.
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Plum Corporation began the month of May with $1,500,000 of current assets, a current ratio of 1.90:1, and an acid-test ratio of 1.30:1.
During the month, it completed the following transactions (the company uses a perpetual inventory system).
May 2 Purchased $75,000 of merchandise inventory on credit.
May 8 Sold merchandise inventory that cost $55,000 for $125,000 cash.
May 10 Collected $25,000 cash on an account receivable.
May 15 Paid $31,500 cash to settle an account payable.
May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
May 22 Declared a $1 per share cash dividend on its 65,000 shares of outstanding common stock.
May 26 Paid the dividend declared on May 22.
May 27 Borrowed $115,000 cash by giving the bank a 30-day, 10% note.
May 28 Borrowed $145,000 cash by signing a long-term secured note.
May 29 Used the $260,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below showing Plum's
(1) current ratio,
(2)…
Aspen Company has sales of $2,000,000, cost of goods sold of $200,000, and selling
and administrative costs of $500,000. Aspen Company's gross margin is:
A. $1,800,000.
B. $1,500,000.
C. $1,300,000.
D. $1,700,000.
what is the rate of return when 10 shares of stock a, purchased for $30/share and sold for $380? the commission on the sale is $6
Chapter 15 Solutions
Foundations of Business (MindTap Course List)
Ch. 15.1D - Prob. 1CCCh. 15.1D - Prob. 2CCCh. 15.1D - Prob. 3CCCh. 15.1D - Prob. 4CCCh. 15.2B - Prob. 1CCCh. 15.2B - Prob. 2CCCh. 15.2B - Prob. 3CCCh. 15.3E - Prob. 1CCCh. 15.3E - Prob. 2CCCh. 15.3E - Prob. 3CC
Ch. 15.4D - Prob. 1CCCh. 15.4D - Prob. 2CCCh. 15.4D - Prob. 3CCCh. 15.5D - Prob. 1CCCh. 15.5D - Prob. 2CCCh. 15.5D - Prob. 3CCCh. 15.5D - Prob. 4CCCh. 15.6C - Prob. 1CCCh. 15.6C - Prob. 2CCCh. 15.6C - Prob. 3CCCh. 15.7 - Prob. 1CCCh. 15.7 - Prob. 2CCCh. 15.8B - Prob. 1CCCh. 15.8B - Prob. 2CCCh. 15 - Prob. 1DQCh. 15 - Prob. 2DQCh. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - Prob. 5DQCh. 15 - Prob. 6DQ
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