Use the following data to answer Question 22 & 23 Accounts payable Accounts rece

Question

Use the following data to answer Question 22 & 23 Accounts payable Accounts receivable Accrued liabilities Cash Intangible assets Inventory Long-term investments Long-term liabilities Marketable securities Notes payable (short-term) Property, plant, and equipment Prepaid expenses 30,000 65,000 7,000 20,000 40,000 72,000 100,000 75,000 36,000 20,000 625,000 2,000 22. Based on the above data, what is the amount of quick assets? a. $163,000 b. $195,000 c. $121,000 d. $56,000 23. Based on the above data, what is the amount of working capital? a. $238,000 b. $138,000 c. $178,000 d. S64,000 24. A company's sales in 2013 were $250,000 and in 2014 were $287,500. Using 2013 as the base year, the sales trend percent for 2014 is: 87% 100% 115% b. c. d. 15% 25. The ratio computed by dividing quick assets by current liabilities is a. current ratio b. earnings ratio c. acid-test ratio d. working capital ratio service, producer quality, product features, the production process, and employee interactions, is called: 26. An attitude of constantly seeking ways to improve company operations, including customen a. Continuous improvement b. Customer orientation c. Just-in-time d· Theory ofconstraints FINAL EXAM ACC 102

Explanation / Answer

Quick asset are most liquid asset including cash and marketable securities.

Quick asset = 20000 + 36000

                     = $56000

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Working capital = Current asset – current liability

          = (65000 + 20000 + 72000 + 36000 + 2000) – (30000 + 7000 + 20000)

           = 195000 – 57000

         = $138000

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Sales trend % = (2014 sales – 2013 sales)/2013 sales

                       = (287500 – 250000)/250000

                     = 37500/250000

                     = .15 or 15%

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Acid test ratio = Quick ratio (Cash + marketable securities)/current liability

Correct answer is C.

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Hope this answer your query.

Feel free to comment if you need further assistance. J

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