Acid-test ratio: The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio . Accounts receivable turnover: Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period. Average collection period: Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

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Answer 1

Question

Chapter 8, Problem 8.34AP

(1)(a)

To determine

Acid-test ratio:

The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio.

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

(1)(b)

To determine

To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

(1)(c)

To determine

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

(2)

To determine

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

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Job H85 was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $3,300 of direct materials and used $4,700 of direct labor. The job was not finished by the end of the month but needed an additional $3,200 of direct materials and additional direct labor of $7,400 to finish the job in October. The company applies overhead at the end of each month at a rate of 100% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?

Answer 2

Question

Chapter 8, Problem 8.34AP

(1)(a)

To determine

Acid-test ratio:

The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio.

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

(1)(b)

To determine

To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

(1)(c)

To determine

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

(2)

To determine

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 8.34AP

(1)(a)

To determine

Acid-test ratio:

The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio.

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

(1)(b)

To determine

To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

(1)(c)

To determine

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

(2)

To determine

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.34AP

(1)(a)

To determine

Acid-test ratio:

The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio.

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

(1)(b)

To determine

To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

(1)(c)

To determine

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

(2)

To determine

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 8, Problem 8.34AP

(1)(a)

To determine

Acid-test ratio:

The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio.

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

(1)(b)

To determine

To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

(1)(c)

To determine

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

(2)

To determine

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

Answer 6

Chapter 8, Problem 8.34AP

(1)(a)

To determine

Acid-test ratio:

The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio.

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

Answer 7

Chapter 8, Problem 8.34AP

(1)(a)

To determine

Acid-test ratio:

The financial ratio which evaluates the ability of a company to pay all of its current liabilities, if they came due immediately is referred to as acid-test ratio.

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To compute: N Cosmetic Supply’s acid-test ratio for 2018 and 2017.

Answer 8

(1)(b)

To determine

To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

Answer 9

(1)(b)

To determine

To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

Answer 10

(1)(c)

To determine

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

Answer 11

(1)(c)

To determine

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

Answer 12

(2)

To determine

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

Answer 13

(2)

To determine

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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To calculate: N Cosmetic Supply’s accounts receivable turnover ratio for 2018 and 2017.

To calculate: N Cosmetic Supply’s days’ sales in receivables for 2018 and 2017.

To identify: Whether each ratio has been improved or deteriorated, and identify whether each ratio’s trend is favorable or unfavorable.

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Chapter 8 Solutions