At December 31 a company\'s records show the following information: Cash $10,000
ID: 2566898 • Letter: A
Question
At December 31 a company's records show the following information:
Cash $10,000
Accounts Receivable 30,000
Inventory 30,000
.Prepaid Insurance 6, 000
Long-term Assets 120,000
Accounts Payable 30,000
Notes Payable due in 10 months 25,000
Wages Payable 5,000
Long-term Liabilities 100,000
Stockholders' (Owner's) Equity 36,000
Net Income 18,000
Calculate the current ratio
Calculate the Debt to Equity ratio
Calculate the Return on Assets
Calculate the Return on Equity
Explanation / Answer
current ratio = current assets/current liabilities 76,000/60,000 1.27 Debt to Equity ratio = total liabilities/total Equity 160,000/36000 4.444444 Return on assets = net income/total assets 18000/196,000 9.18% Return on Equity = net income/total Equity = 18000/36000 50.00%
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