Chapter 5, Problem 1AA

To determine

Concept Introduction:

Cost of goods purchased:

Cost of goods purchased can be defined as the total manufactured or finished inventory available with a business for sale. Sometimes, some of the finished goods are sold and some are left in the inventory. In such case, the cost of goods purchased is calculated by adding cost of goods sold or cost of sales and ending inventory.

To compute:

Cost of Goods purchased for Apple for the year ended September 30, 2017

To determine

Concept Introduction:

Current Ratio:

The current ratio can be defined as the ratio of total current assets to total current liabilities. A current ratio is a measures that a company's ability to pay off its short-term and long-term obligations. A current ratio is calculated as under −

$Currentratio=\frac{Totalcurrentassets}{Totalcurrentliabilities}$

Acid-test Ratio:

Acid-test ratio is calculated by dividing quick assets by current liabilities. The quick assets include all current assets except prepaid expenses and inventories.

To compute:

Current ratio and acid-test ratio for September 30, 2017 and September 30, 2016

To determine

Concept Introduction:

Current Ratio:

The current ratio can be defined as the ratio of total current assets to total current liabilities. A current ratio is a measures that a company's ability to pay off its short-term and long-term obligations. A current ratio is calculated as under −

$\text{Current ratio =}\frac{\text{Total current assets}}{\text{Total current liabilities}}$

Whether Apple's 2017 current ratio outperform or underperform

To determine

Concept Introduction:

Acid-test Ratio:

Acid-test ratio is calculated by dividing quick assets by current liabilities. The quick assets include all current assets except prepaid expenses and inventories.

Whether Apple's 2017 quick ratio outperform or underperform