riohondo.instructure.com Weygandt, Financial& Managerial Accounting, 2e Help I S
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riohondo.instructure.com Weygandt, Financial& Managerial Accounting, 2e Help I System Announcements A Assignment Gradebook ORION Downloadable eTextboolk Study & Practice pen Assignment ESOURCES Exercise 14-7 Frizell Company has the following comparative balance sheet data. mework FRIZELL COMPANY Balance Sheets 2016- Cash s14,100 $29,400 ts by StudyInventory its by Study Accounts receivable (net) 70,600 59,200 59,900 49,300 201,500 177,000 $346,100 $314,900 $49,600 $59,300 Mortgage payable (696) 109,500 109,500 Common stock, $10 par 138,500 125,000 48,50021,100 $346,100 $314,900 Plant assets (net) Accounts payable Retained earnings Additional information for 2017: 1. Net income was $24,400. 2. Sales on account were $413,500. Sales returns and allowances were $19,900. Cost of goods sold was $199,400. Compute the following ratios at December 31, 2017. (Round answers to I decimal place, e.g. 1.6.) (a) Current ratio 3.Explanation / Answer
Current ratio = Current asset/Current liability
= (14100 + 70600 + 59900)/49600
= 144600/49600
= 2.91
Acid test ratio = (Current asset – inventory)/Current liability
= (144600 – 59900)/ 49600
= 84700/49600
= 1.71
Account receivable turnover = Net credit sales/Average account receivable
= (413500 – 19900)/(70600+59200)/2
= 393600/64900
= 6.07
Inventory turnover = Cost of goods sold/Average inventory
= 199400/(59900+49300)/2
= 199400/54600
= 3.65
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