1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
3241004551 [841]
1 year ago
13

Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The two companies are exactly alike

except for the difference in inventory cost flow assumptions. Costs of inventory items for both companies have been rising steadily in recent years, and the following company has increased its inventory the following year. Ignore tax effects.
Required:
Identify which company will report the higher amount for the following ratios. If it is not possible to determine, explain why.
(e) Quick ratio
Business
1 answer:
ANEK [815]1 year ago
4 0

Quick ratio is 1.47.

Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its short-term obligations with its most liquid assets.

Gross Profit 72000 67000

Operating expenses and interest expense 56000 53000,

Pretax Income 2200014000

Income Tax 3000 4000

Net Income 14000 10000

Balance sheet Year? Year

cash 4000 7000

Accounts Receive ab 114000 18000

Taventory 40000 34000,

Property & Equipment 45000 36000

Total Assets 302000 97000

Current Liabilities ‘i6000 4.7000

Long term Liabilities 5000 45000

Common stock 30000 30000

Retained Earnings 1120005000

Total Liabilities & Stock holders equity 10300037000,

L. Current Ratio = Current Assets / Current Liabilities

Year? Year

Current Ratio 36347

2.Quick Ratio

‘Current Assets - Inventory / Current Liabilities

Year? Year

Quick Ratio is 1.47

2.Profit Margin = Net profit /Sales

Year? Year

Profit Margin 737% 5.99%

Learn more about quick Ratio here

brainly.com/question/25894261

#SPJ4

You might be interested in
: In 2021, Garret Market remained fully open while conducting inventory, but in 2022 Garrett closed during inventory. In 2023, G
andreev551 [17]

Answer:

The answer is:

  • 2022 most accurate inventory
  • 2021 least accurate inventory

Explanation:

Garret Market uses a periodic inventory system (updates are made on a periodic basis) and in order to carry out this process correctly, the inventory should remain closed. Only in 2022 was the inventory closed, so it should be the most accurate. In 2021 the store remained fully opened and inventory was modified daily, so it should be the least accurate.

8 0
3 years ago
Read 2 more answers
Which of the following is a regular outcome of being late to work
Grace [21]
A regular outcome could be a lot of hate from co-workers and your boss, and eventually you might be put on admin leave or fired.
6 0
3 years ago
The incomes of trainees at a local mill are normally distributed with a mean of $1,100 and a standard deviation $150. what perce
FinnZ [79.3K]
In this problem we are given the mean of $1100, SD of $150 and x equal to $900. In this case, we need to use the z-score table to answer the problem: 
z = (x-mean)/sd
z = (900-1100)/150
z = -1.33
from z-table, the probability at the left of z= -1.33 is equal to 9.18%
8 0
3 years ago
Which of the following is an element of economic forces? a) New production forces b) Health, food, stress c) Competitors and sup
Ksju [112]

Competitors and supply chain is an element of economic forces.

<h3>What are economic forces?</h3>

Economic forces are those factors that assist a firm in terms of its competitiveness in the environment it operates.

Here, economic forces have a direct impact on business and are essential factors that can help an organization in accomplishing its targets.

Learn more about economic forces here: brainly.com/question/13721949

#SPJ1

4 0
2 years ago
Loc Nguyen sold his personally owned boat for $6,000. Loc is not self-employed and he did not have any outstanding loans on the
lesantik [10]

Question Completion with options:

Select one:

a. Include the $5,000 in total income on Form 1040

b. Include the $5,000 as a capital gain on Schedule D

c. Include the $5,000 as self-employment income on Schedule C

d. Include the $5,000 as interest income on Form 1040

Answer:

Loc Nguyen should:

b. Include the $5,000 as a capital gain on Schedule D.

Explanation:

Both long-term and short-term capital gains and deductible capital losses are reported on Schedule D of Form 1040.  If the gain from the sale of the boat is a long-term capital gain, it will be subject to the lower capital gain tax rate of up to 20%, unlike the short-term capital gain that attracts a rate of up to 37%.

3 0
2 years ago
Other questions:
  • What future IT capability needs (both physical and human) could the organisation have with respect to document design and produc
    11·1 answer
  • The amount by which federal spending exceeds revenue in a given year is known as ap gov multiple choice
    14·1 answer
  • Five years of realized returns for BLM are given in the following table.
    13·1 answer
  • A financial analyst is presented with information on the past records of 60 start-up companies and told that in fact only 3 of t
    15·1 answer
  • On 3/15/20, Robertson Corp. bought land from Lear, Inc. for $248,000. Lear had carried the land on its books at $240,000. Robert
    7·1 answer
  • The Accounts Receivable account has a beginning balance of $10,000 and the company provides services of $50,000 on account durin
    14·1 answer
  • Aquilera, Inc., has sales of $19.6 million, total assets of $14.6 million, and total debt of $5.4 million. The profit margin is
    11·1 answer
  • Which tool of monetary policy allows the Federal Reserve to decrease the
    12·2 answers
  • Example 31: S borrows 5,00,000 to buy a house. If he pays equal instalments for 20 years
    11·1 answer
  • You have just turned 27 and may now spend a portion of the trust fund your parents established for you. The terms of the trust f
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!