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skad [1K]
3 years ago
6

Suppose the following selected condensed data are taken from a recent balance sheet of Bob Evans Farms (in millions of dollars).

Cash $ 30.7 Accounts receivable 21.4 Inventory 27.4 Other current assets 22.5 Total current assets $102.0 Total current liabilities $200.0 Compute working capital and the current ratio.
Business
1 answer:
kicyunya [14]3 years ago
8 0

Answer:

For working capital, it is -$98million or($98million).

For current ratio, it is 0.51

Explanation:

1. The formula for the working capital is current asset minus current liabity.

Current assets are cash, accounts receivable, inventory and other Curren assets.

The addition of all these figures for current assets($ 30.7+$21.4+27.4+22.5) totalled $102.0

Current liability is $200.0

Therefore, working capital is:

$102 - $200

= -$98million or ($98million)

The working capital is in negative of $98million.

The current ratio = current asset/current liability.

$102.0million/$200.0million

=0.51

The current ratio of 0.51 means the company cannot meet its short term liquidation. There is a liquidity problem.

The ideal current ratio is at least 1.0

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8 0
3 years ago
Venzuela Company’s net income for 2020 is $50,000. The only potentially dilutive securities outstanding were 1,000 options issue
aev [14]

Answer:

$4.67 per share

Explanation:

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where,

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Outstanding shares is 10,000

And, the diluted shares is computed by following calculations

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And,

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Therefore,

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4 0
3 years ago
Which of the following statements is correct? Group of answer choices The normal balance of revenue is a debit. The normal balan
kaheart [24]

Answer:

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For accounts with negative balance a credit reduces its balance while a debit increases its balance.

- Asset: Debit

- Expense: Debit

- Dividends: Debit

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- Owner’s Equity: Credit

- Revenue: Credit

- Retained Earnings: Credit

Liabilities are debt owed by a business. When payment is given out to settle a debt (a debit) it reduces to amount a business owes.

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