1. The following items are reported on a company\'s balance sheet: Round your an
ID: 2591734 • Letter: 1
Question
1.
The following items are reported on a company's balance sheet:
Round your answers to two decimal places.
a. Determine the current ratio.
b. Determine the quick ratio.
2.
A company reports the following:
Round your answers to one decimal place. Assume a 365-day year.
a. Determine the accounts receivable turnover.
b. Determine the number of days' sales in receivables.
3.
A company reports the following:
Round your answers to one decimal place.
a. Determine the inventory turnover. Assume a 365-day year.
b. Determine the number of days' sales in inventory. Assume a 365-day year.
Cash $287,500 Marketable securities 99,000 Accounts receivable 255,800 Inventory 186,700 Accounts payable 293,300Explanation / Answer
1) Current ratio = current assets / current liabilities = 829000 /293300 2.83 Quick ration = ( current assets- inventory)/current liabilities (642300/293300) 2.19 2) accounts receivable turnover = net sales/average account receivable = 385,440/40150 9.6 times b) in days = 365/account receivable turnover 365/9.6 38.02083 38 days 3) inventory turnover = cogs/average inventory 1,989,250/182500 10.9 times in days = 365/10.9 33.48624 or 35 days
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