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Serjik [45]
3 years ago
5

Assume a company's current ratio and acid-test ratio are less than 1.0 before it purchases inventory on credit. When it makes th

e purchase:
Business
1 answer:
I am Lyosha [343]3 years ago
7 0

Answer: b. Its quick ratio decreases.

Explanation:

The Quick ratio is calculated net of inventory to determine if a company can cover its current liabilities with its more liquid current assets. The formula is to subtract Inventory from the Current Assets and then divided that by the Currency liabilities.

The Quick ratio will be less than before because the number of current assets will not change but the amount of current liabilities will change as the goods were purchased on credit. With a larger denominator, the resultant ratio will be less than before.

You might be interested in
ACME labs bought a new inspection device for $182,730. The accounting department has estimated that the device will have an annu
oksian1 [2.3K]

Answer:

The salvage value taken is $16,368.34

Explanation:

ANSWER:

initial cost = $182,730

rate = 15%

n = 7 years

annualized capital cost = $42,442

salvage value = ?

first we will find the present worth.

annual worth = r * present worth / ( 1 - ( 1+ r) ^ - n)

42,442 = 15% * pw / ( 1 - (1+15%) ^ - 7)

42,442 = 0.15pw / ( 1 - (1.15) ^ -7)

42,442 = 0.15 pw / ( 1 - 0.37593)

42,442 = 0.15 pw / 0.6240

42,442 * 0.6240 = 0.15 pw

$26,486.48 = 0.15 pw

pw = $26,486.48 / 0.15

pw = $176,576.5343

pw also equals the initial investment + salvage value.

pw = initial investment + salvage value(p/f,i,n)

i = 15% , n = 7 years and pw will be taken negative here

-176,576.5343 = -182,730 + salvage value(p/f,15%,7)

-176,576.5343 +182,730 = salvage value(p/f,15%,7)

6,153.465 = salvage value * 0.3759

salvage value = 6,153.465 / 0.3759

salvage value = 16,368.34

so , the salvage value taken is $16,368.34

7 0
3 years ago
You want to show the stock price of a company over the last 6 months. What type of chart would be best for this purpose?
velikii [3]
C. Line

Because the stock prices rise and fall and a line graph best depicts the fluctuation of said prices
7 0
3 years ago
Soundgarden Company sold 200 color laser copiers on July 10, 2020, for $4,000 apiece, together with a 1-year warranty. Maintenan
ziro4ka [17]

Answer:

Soundgarden Company

Journal Entries:

July 10, 2020:

Debit Cash Account (or Accounts Receivable) $800,000

Credit Sales Revenue $800,000

To record the sale of 200 copiers at $4,000 apiece.

July 10, 2020:

Debit Warranty Expense $66,000

Credit Warranty Liability $66,000

To record the estimated warranty maintenance on copiers sold.

December 31:

Debit Warranty Liability $17,000

Credit Inventory $17,000

To record actual warranty costs incurred.

Explanation:

Soundgarden should record these transactions according to the matching principle, whereby warranty expense is recognized in the period that matches the sale so that all expenses related to sales are recognized when the sales are recognized.  This is achieved by creating a warranty liability account after the sales and recording a warranty expense as the debit entry.  When actual warranty costs are incurred, the Soundgarden Company will debit the warranty liability and credit the inventory actual for the actual costs.

7 0
3 years ago
The building code of River City requires that elevators in public buildings be inspected every nine months. Hal did not have the
Archy [21]

Answer: Public tort

Explanation: In simple words, public tort refers to the minor breach of contract by an individual. It is considered as a civil offense but still the acts under this act carries a criminal punishment.

In the given case, Hal did not make the elevator inspected in the seventh story for two years, however all other were inspected as per the rules. Thus, we can conclude that he breached the rule on a small level.

Hence from the above we can conclude that his offense would be classified as public tort.

3 0
3 years ago
.
kobusy [5.1K]

Hi!

<em>Option C is correct.</em>

<em></em>

Explanation of the choices:

A. - This seems a good choice, however it's not the best choice. Let's come back to it.

B. - This is the best choice because they get to experience first-hand how to manage and make their own money decisions. Choice A might seem good at first, but we can see this is better because they get to make their own decisions and experience hands-on how to do it.

C - This is not a good choice, because it's best to expose children early so they can grow up knowing how to do it.

D - This choice doesn't make sense. What is the point of money if you store it away and don't spend it? This will likely not be a good lesson in the future.

Hope this helps! :D

5 0
2 years ago
Read 2 more answers
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