The following data were taken from the balance sheet of Gostkowski Company at th

Question

The following data were taken from the balance sheet of Gostkowski Company at the end of two recent fiscal years:

$700,000

a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.

Current Year Previous Year Cash $480,000 $392,000 Marketable securities 576,000 411,600 Accounts and notes receivable (net) 384,000 316,400 Inventories 408,000 333,200 Prepaid expenses 552,000 506,800 Total current assets $2,400,000 $1,960,000 Accounts and notes payable (short-term) $600,000 $525,000 Accrued liabilities 200,000 175,000 Total current liabilities $800,000

$700,000

Explanation / Answer

Particulars Current Year Previous Year Cash 480000 392000 Marketable Securities 576000 411600 Accounts and notes receivables 384000 316400 Inventories 408000 333200 Prepaid Expenses 552000 506800 Total Current assets 2400000 1960000 Accounts and notes payable 600000 525000 Accrued Libilities 200000 175000 Total Current Liabilities 800000 700000 Working Capital( Total Current Assets - Total Current Liabilities ) 1600000 1260000 Current Ratio ( Current assets / Current Liabilities ) 3 2.8 Quick Ratio ( Current Assets - Stock - Prepaid Expenses / Current Liabilities ) 1.8 1.6

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.