Please refer to Table 4minus 1 for the following questions. Table 4minus 1 Stewa
ID: 2618345 • Letter: P
Question
Please refer to Table
4minus
1
for the following questions.
Table
4minus
1
Stewart Company
Balance Sheet
?Assets:
?
?
Cash and marketable securities
?
?$600,000
Accounts receivable
?
?900,000
Inventories??
?
?1,500,000
Prepaid expenses
?
?75,000
Total current assets
?
?$3,075,000
Fixed assets
?8,000,000
?
?Less: accum. depr.
?(2,075,000)
?
Net fixed assets
?
?$5,925,000
Total assets
?
?$9,000,000
?
?
?
?Liabilities:
?
?
Accounts payable
?
?$800,000
Notes payable?????
?700,000
Accrued taxes
?
?50,000
Total current liabilities
?
?$1,550,000
Longminus
term
debt
?
?2,500,000
?Owner's equity? (1 million shares of common stock? outstanding)
?
?4,950,000
Total liabilities and? owner's equity
?
?$9,000,000
?
?
?
Net sales? (all credit)
?
?$10,000,000
?Less: Cost of goods sold
?
?(3,000,000)
Selling and administrative expense
?
?(2,000,000)
Depreciation expense
?
?(250,000)
Interest expense
?
?(200,000)
Earnings before taxes
?
?4,550,000
Income taxes
?
?(1,820,000)
Net income
?
?$2,730,000
Based on the information in Table
the current ratio is
A. 1.98
B. 2.86
C. 2.88
D. 1.92
?Assets:
?
?
Cash and marketable securities
?
?$600,000
Accounts receivable
?
?900,000
Inventories??
?
?1,500,000
Prepaid expenses
?
?75,000
Total current assets
?
?$3,075,000
Fixed assets
?8,000,000
?
?Less: accum. depr.
?(2,075,000)
?
Net fixed assets
?
?$5,925,000
Total assets
?
?$9,000,000
?
?
?
?Liabilities:
?
?
Accounts payable
?
?$800,000
Notes payable?????
?700,000
Accrued taxes
?
?50,000
Total current liabilities
?
?$1,550,000
Longminus
term
debt
?
?2,500,000
?Owner's equity? (1 million shares of common stock? outstanding)
?
?4,950,000
Total liabilities and? owner's equity
?
?$9,000,000
?
?
?
Net sales? (all credit)
?
?$10,000,000
?Less: Cost of goods sold
?
?(3,000,000)
Selling and administrative expense
?
?(2,000,000)
Depreciation expense
?
?(250,000)
Interest expense
?
?(200,000)
Earnings before taxes
?
?4,550,000
Income taxes
?
?(1,820,000)
Net income
?
?$2,730,000
Explanation / Answer
Current Ratio = total current asset/ total current liabilities
= $3075000/$1550000
= 1.98
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.