2 Cash $65,000 50,000 110,000 140,000 10,000 900,000 125,000 100,000 25,000 250,

Question

2 Cash $65,000 50,000 110,000 140,000 10,000 900,000 125,000 100,000 25,000 250,000 100,000 400,000 50,000 225,000 Temporary Investments Accounts and notes receivable Inventory Pre paid expenses Fixed assests (net) Accounts payable Notes payable (Short term non-interest bearing) Accured Liabilities Mortagage note payable, 5% due in 2025 Preferred 8% stock, $100 par Common Stock, $10 par Paid-in-capital in Exces of Par, Common stock Retaind earnings Selected data related to 12 mnths of the current year reveal the following: Average common stockholders' equity Average stockholders' equity Average inventory Average total assests Cash dovodends paid on common stock $650,000 750,000 130,000 1,200,000 40,000 910,000 140,000 20,000 88,000 1,500,000 Cost of goods sold Income before income tax Interest expense Net Income The common stock was selling for $25 per share a the end of the year. What is the Current ratio?

Explanation / Answer

Current Assets: $ Cash 65000 Temporary investments 50000 Accounts and notes receivable 110000 Inventory 140000 Prepaid expenses 10000 375000 Current Liabilities: Accounts Payable 125000 Notes payable 100000 Accrued Liabilities 25000 250000 Current ratio: Current Assets/Current Liabilites 375000/250000 1.5

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