Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Textbook Question
Chapter 5, Problem 5.12S
LO 7
(Learning Objective 7: Evaluate liquidity using the quick [acid-test] ratio and days’ sales in receivables) Northern Products reported the following amounts in its 2019 financial statements. The 2018 amounts are given for comparison.
![Chapter 5, Problem 5.12S, LO 7 (Learning Objective 7: Evaluate liquidity using the quick [acid-test] ratio and days sales in](http://dev-ingestion-image-output.s3-website-us-east-1.amazonaws.com/9780134725987/Chapter-5/images/25987-5-5.12s-question-digital_image001.jpg)
Requirements
1. Compute Northern’s quick (acid-test) ratio at the end of 2019. Round to two decimal places. How does the quick ratio compare with the industry average of 0.92?
2. Compare days’ sales outstanding for 2019 with the company’s credit terms or net 30 days.
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Chapter 5 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
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