Assets Liabilities and Stockholders\' Equity Current Asssets: Cash $50,000 Accou
ID: 2668371 • Letter: A
Question
Assets Liabilities and Stockholders' EquityCurrent Asssets:
Cash $50,000 Accounts Payable $220,000
Accounts Receivable $280,000 Accrued Taxes $80,000
Inventory $240,000 Bonds Payable (long-term) $118,000
Common Stock $100,000
Plant & Equipment $380,000 Paid in Capital $150,000
Retained earnings $282,000
Total Asset $950,000 total Liabilities and stockholders' Equity $950,000
Sales $3,040,000 Sales on Credit 75%
What is the current?
a) Current Ratio___ c) Debt to total Assets____
b) Quick Ratio___ d) Asset turnover____
e) Average Collection Period______
Explanation / Answer
A.) 1.9
B.) 1.1
C.) 0.315789
D.) 3.2
E.) 44.82456 days
Current Ratio = Cash + A/R + Inventory / A/P +acrrued Taxes
= 570,000 / 300,000 = 1.3636
Quick Ratio = Cash + A/R / 300,000 = 330,000/300,000=1.1
Debt/Assets = 418,000 / 950,000 = 0.44
Turn over = 3,040,000 / 950,000 = 3.2
Credit Sales = 3,040,000 * 75% = 2,280,000
Period = 365*(AR / Credit Sales) = 365*280,000/2,280,000 = 44.82456 days