Brief Exercise 24-8 Answer each of the questions in the following unrelated situ

Question

Brief Exercise 24-8 Answer each of the questions in the following unrelated situations is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $440,300, what is the amount of current tiabilities? Current Liabilities last year of $267,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover (b) A company had an average inventory s 8 this year, what will average inventory have to be during the current year? (Bund answer to Average Inventory $35,440 what is the current ratio? What is the acid-test ratio? If (e) A company has current assets or $87,000 (of which $35,440 is inventory and prepaid items) and current liabilities of $3 the company borrows $12,060 Current Ratio Acid Test Ratio New Current Ratio New Acid Test Ratio cash from a bank on a 120-day loan, what will its current ratio be? What wis the acid-test ratio be? (Round answers to 2 decímal places, e.g. 2.5o.) clares a cash dividend of $185,700. What is the current ratio after the deciaration but before payment? what is the current ratio after the payment of the dividend? (Round answers to 2 decimal Current ratio after the deciaration but before payment Current ratio after the payment of the dividend (d) A company has current assets

Explanation / Answer

A.Difference between current ratio and quick ratio = 4

Inventory is 440300/4 = 110075

Current liabilities = 110075

B. Average inventory is 267000 last year inventory turnover is 5

current year inventory turnover is 8 so, 267000/5*8 = 427200

C. current assets = current asset/ current liabilities = 87000/35440 = 2.46

Quick ratio = curent asset - inventory / current liabilities = 87000-35440/35440 = 51560/35440 =1.46

new current ratio = 99060/47500 = 2.09

new quick ratio = 99060-35440/47500 = 1.34

D. CURRENT RATIO = 589600/241300 = 2.44

QUICK RATIO = 589600+185700/241300 = 3.21

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