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Nataly [62]
3 years ago
6

Wildhorse Corp. has total current assets of $12,152,000, current liabilities of $5,849,000, and a quick ratio of 0.94. How much

inventory does it have?
Business
1 answer:
White raven [17]3 years ago
4 0

Answer:

Wildhorse Corp. has inventory of $6,653,940

Explanation:

The quick ratio is a liquidity ratio that indicates a company's ability to pay its current liabilities when they come due without needing to sell its inventory or get additional financing. The quick ratio is calculated by the following formula:

Quick ratio = (Cash & equivalents + Short Term investments + Accounts receivable)/Current Liabilities

(Cash & equivalents + Short Term investments + Accounts receivable) = Quick ratio x Current Liabilities = 0.94 x $5,849,000 = $5,498,060

Inventory = Total current assets - (Cash & equivalents + Short Term investments + Accounts receivable) = $12,152,000 - $5,498,060 = $6,653,940

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On January 2, 2020, Vaughn Manufacturing began construction of a new citrus processing plant. The automated plant was finished a
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1. The weighted-average accumulated expenditures for 2017 were:

c. $1,200,000.

2. The interest capitalized for 2017 was:

b. $144,000

3. The weighted-average accumulated expenditures for 2018 by the end of the construction period were:  

= $2,546,000.

4. The interest capitalized for 2018 was:

= $267,000.

Explanation:

a) Data and Calculations:

Expenditures for the construction were as follows:

Date                                   Amount of     No. of months  Weighted Average

                                         expenditure                                 Expenditure

2020:

January 2, 2020                 $613,000         12/12                     $613,000

September 1, 2020            1,802,400          4/12                       600,800

December 31, 2020          1,802,400          0/12                        0

Total weighted-average expenditure for 2020 =                $1,213,800

Which is approximately = $1,200,000

Interest capitalized = $144,000 ($1,200,000 * 12%)

Capitalized expenditure by December 31, 2020 = $1,344,000 ($1,200,000 + $144,000)

Date                                   Amount of     No. of months  Weighted Average

                                         expenditure                                 Expenditure

2021:

January 1, 2021                 1,344,000        9/9                   $1,344,000

March 31, 2021                  1,802,400       6/9                      1,201,600

September 30, 2021        1,203,000        0/9                      0

Total weighted-average expenditure for 2020 =           $2,545,600

Which is approximately $2,546,000

Interest capitalized for 2018 = $267,330 ($2,546,000 * 10.5%)

Approximately $267,000

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