Use the following balance sheet for Delta Company to answer the following 4 ques
ID: 2815405 • Letter: U
Question
Use the following balance sheet for Delta Company to answer the following 4 questions.
Assets
Liabilities and owners equity
Cash 600
Accounts Payable 700
Inventory 80
Notes Payable 200
Accounts Receivable 400
Current Maturing LTD 40
Fixed assets 1500
Stock 1300
Accumulated Depreciation (90)
Retained Earnings 250
Total 2490
Total 2490
1. Which of the following statements is accurate in regards to Delta's financial position?
Delta's NWC suggests that solvency is a concern.
Delta's NWC suggests that the firm has a liquidity concern.
Delta's WCR suggests that the firm has a solvency concern.
None of the above.
2. Find Delta's current ratio
3. Find delta's net liquid balance (NLB)
4.Suppose that Delta brought in $200 in sales and its cost of goods sold is equal to 50% of sales. Find Delta's DIH. Round to the nearest whole day.
292
146
243
302
None of the above
Assets
Liabilities and owners equity
Cash 600
Accounts Payable 700
Inventory 80
Notes Payable 200
Accounts Receivable 400
Current Maturing LTD 40
Fixed assets 1500
Stock 1300
Accumulated Depreciation (90)
Retained Earnings 250
Total 2490
Total 2490
Explanation / Answer
1) Answer : None of the above This is because current assets are more than current liabilities, so no solvency or liquidity concern. 2) Answer : Current ratio = CA / CL = 1080 / 940 = 1.15 3) Net liquid balance = CA - CL = 1080 -940 = 140 4) DIH, the term is not clear to me, so please sorry for that.
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