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My name is Ann [436]
3 years ago
6

Burt's TVs has current liabilities of $26 million. Cash makes up 50 percent of the current assets and accounts receivable makes

up another 30 percent of current assets. Burt's current ratio = .95 times. What is the value of inventory listed on the firm's balance sheet? (Do not round intermediate steps.)
O $13 m

O $20 m

O $4.94 m

O $7.41 m
Business
1 answer:
nydimaria [60]3 years ago
6 0

Answer:

$4.94 million

Explanation:

As we know that

Current ratio = Total Current assets ÷ total current liabilities  

0.95 times = Total current assets ÷ $26 million

So, the total current assets would be

= $24.7 million

So, the value of inventory would be

= (One - current assets percentage - account receivable percentage) × current assets

= (1 - 50% - 30%) × $24.7 million

= 0.20 × $24.7 million

= $4.94 million

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