Tamarisk Company has been operating for several years, and on December 31, 2017,

Question

Tamarisk Company has been operating for several years, and on December 31, 2017, presented the following balance sheet.

TAMARISK COMPANY
BALANCE SHEET
DECEMBER 31, 2017

The net income for 2017 was $27,500. Assume that total assets are the same in 2016 and 2017.

Compute each of the following ratios. (Round answers to 2 decimal places, e.g. 1.59 or 45.87%.)

TAMARISK COMPANY
BALANCE SHEET
DECEMBER 31, 2017

Cash $43,300 Accounts payable $81,800 Receivables 79,600 Mortgage payable 130,500 Inventory 94,100 Common stock ($1 par) 150,400 Plant assets (net) 219,900 Retained earnings 74,200 $436,900 $436,900

Explanation / Answer

a)

b)

c)

d)

Current ratio = Current assets / Current liabilities Current ratio = ($43,300+$79,600+$94,100) / $81,800 Current ratio = 2.65

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