At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepai

Question

At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 2817 2815 $ 29,226 $ 35,198 $ 35,939 47,918 59, 538 3,876 272,64 242,971217,629 $ 500,367 431,351 $355,900 83,852 185,427 9,222 62,281 82.194 8,787 Liabilities and Equity Accounts payable Long-term notes payable secured by $123,345 $ 73,627 $46,509 mortgages on plant assets Common stock, $18 par value Retained earnings Total liabilities and equity 93,128 97,227 73, 654 162,599 162,59e 162,59e 68,237 $ 500,367 431,351 355,980 121,394 97,997 1. Compute the current ratio for the year ended 2017, 2016, and 2015 2. Compute the acid-test ratio for the year ended 2017, 2016, and 2015. Complete this question by entering your answers in the tabs below Required 1Required 2 Compute the current ratio for the years ended December 31, 2017, 2016, and 2015 - Current Ratio Current ratio 2017 2016 2015 to 1 to 1 to 1

Explanation / Answer

Answer:- )- 1)-Current Ratio=Current Assets/ Current Liabilities

                     2015=$35939+47918+50538+3876/$46509

                             =$138271/46509    =2.97 times

2016=$35198+$62201+$82194+$8787/$73627

                             =$188380/$73627   =2.55 times

2017=$29226+$83852+$105427+$9222/$123345

                             =$227727/$123345 =1.85 times

     2)- Acid-test (Quick ratio):- Current assets-Inventory-Prepaid expenses/Current Liabilities

                     2015   =$138271-$50538-$3876/$46509

                                =$83857/$46509 = 1.80 times

2016=$188380-$82194-$8787/$73627

                             =$97399/$73627   =1.32 times

2017=$227727-$105427-$9222/$123345

                             =$113078/$123345 =.92 times

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