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
spayn [35]
3 years ago
5

Emerald corporation's current ratio is 0.5, while ruby (emerald's competitor) company's current ratio is 1.5. Both firms want to

"window dress" their coming end-of-year financial statements. As part of their window dressing strategy, each firm will double its current liabilities by adding short-term debt and placing the funds obtained in the cash account. Which of the statements below best describes the actual results of these transactions?
Business
1 answer:
ruslelena [56]3 years ago
7 0

Answer:

b. Only Emerald Corporation's current ratio will be increased.

Explanation:

Given that

Emerald current ratio is

= 0.5 i.e. = 0.5 ÷ 1

now in case when the current liability is doubles , so the current assets is

= 0.5 + 1 = 1.5

And, the cuurrent liabilities is

= 1 + 1

= 2

so new ratio is

= 1.5 ÷ 2

= 0.75

Now  

Ruby current ratio is

= 1.5

i.e. = 1.5 ÷ 1

Now in case when the current liability is doubled,

the current assets is

= 1.5 + 1

= 2.5

And, current liabilities is

= 1 + 1

= 2

Now new ratio is

= 2.5 ÷ 2

= 1.25

Therefore the emerald current ratio is rised from 0.5 to 0.75

And, the Ruby's ratio has decline from 1.5 to 1.25

You might be interested in
The final task in designing a management information system (mis) is _____.
Gnoma [55]

The final task in designing a management information system (mis) is to provide information which is useful in decision making purposes. Management information system is computerized data base related to financial system. A management information system (mis) is a widely used for a three-resource system that is required for effective organization management.

6 0
3 years ago
A. True
timurjin [86]
<span>FALSE.  You must carry insurance on motorcycles as well as cars. </span>
8 0
3 years ago
Read 2 more answers
All of the following are career pathways for Finance except: A. operations management B. accounting C. banking services D. Insur
Nataly_w [17]

operations management

7 0
3 years ago
Read 2 more answers
What kind of structures must a cell have that would be analogous to a modern business?
Elanso [62]

Answer:

I might be wrong but I beleive the answer is cytoskeleton

6 0
3 years ago
1. A parent provides consulting services to its wholly-owned subsidiary during the year. The parent charged the subsidiary $600,
Fed [463]

Answer:

C

Explanation:

When consolidating parent and a wholly-owned subsidiary we aim to eliminate entries related to the inter company services. Since the subsidiary had recorded a debit to service expense when it was rendered, the adjusting entry would be a credit to the service expense amount by the same figure charged i.e. $600,000 in this case

6 0
3 years ago
Other questions:
  • Peachtree Doors, Inc. is in the process of setting a target price on its newly designed patio door. Cost data relating to the do
    10·2 answers
  • Susan started a cake decorating business that failed. She is convinced that she lacked the necessary funds to promote her busine
    13·1 answer
  • When a company declares a stock dividend, the declaration will
    10·1 answer
  • Energizer emphasizes the importance of a relationship marketing. Why?
    15·1 answer
  • Paul and his friend tori make decorative art out of silver spoons. They want to start a business that they can easily dissolve w
    9·1 answer
  • On January 1, 2018, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $
    6·1 answer
  • Look at the pic. Help me pls.
    5·1 answer
  • List at least one of each transaction related to all of the following business events:
    5·1 answer
  • A job applicant identifies preparing contract documents for construction managers as something the applicant considers
    13·1 answer
  • Most farmers own wells and tube-wells in their farms for irrigation to increase their produce, what adverse effect can this have
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!