please provide the formula you used and step by step of solving the problems 1)

Question

please provide the formula you used and step by step of solving the problems

1) Williams Inc. has a current ratio equal to 3, a quick ratio equal to 1.8, and total current assets of $6 million. Williams' inventory balance is

A) $2,000,000.

B) $2,400,000.

C) $4,000,000.

D) $4,800,000.

2) Given an accounts receivable turnover of 10 and annual credit sales of $900,000, the average collection period is

A) 18.25 days.

B) 36.50 days.

C) 90 days.

D) 40.56 days.

3) Spagler Corporation had retained earnings as of 12/31/16 of $15MM. During 2017, Spagler's net income was $7MM. The retained earnings balance at the end of 2017 was equal to $20MM. Therefore,

Spagler paid a $2MM dividend during the year.

Spagler paid a $5MM dividend during the year.

Spagler sold $5MM in common stock during the year.

Spagler purchased $2MM in treasury stock during the year.

Explanation / Answer

1.

Current ratio=Current assets/Current liabilities

Current liabilities=(6million/3)=$2million

Quick ratio=(Current assets-inventory)/Current liabilities

1.8=(6million-inventory)/2million

(1.8*2)=6-inventory

inventory=6-3.6

=$2.4million

=$2,400,000

2.

Average collection period=365/AR turnover

=(365/10)

=36.5 days

3.

Ending retained earnings=Beginning retained earnings+Net income-Dividends

20=15+7-Dividends

Dividends=(15+7-20)

=$2mm(A).

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