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mart [117]
3 years ago
14

Booker Corporation had the following comparative current assets and current liabilities: Dec. 31, 2019 Dec. 31, 2018 Current ass

ets Cash $60,000 $30,000 Short-term investments 40,000 10,000 Accounts receivable 55,000 95,000 Inventory 110,000 90,000 Prepaid expenses 35,000 20,000 Total current assets $300,000 $245,000 Current liabilities Accounts payable $140,000 $110,000 Salaries payable 40,000 30,000 Income tax payable 20,000 15,000 Total current liabilities $200,000 $155,000 During 2019, credit sales and cost of goods sold were $750,000 and $400,000, respectively. Compute the following liquidity measures for 2019:
Business
1 answer:
Y_Kistochka [10]3 years ago
3 0

Answer:

1. 1.5 Times

2.$100,000

3.0.775 Times

4.$75,000

5.$100,000

Explanation:

Liquidity ratios can be found by just simply putting the given values in their appropriate formulas. All you have to memorize is the simple formulas

1.Current Ratio  

CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES

CURRENT RATIO = $300,000/$200,000

CURRENT RATIO = 1.5 Times

2. Working Capital

WORKING CAPITAL= CURRENT ASSETS- CURRENT LIABILITIES

WORKING CAPITAL= $300,000 - $200,000

WORKING CAPITAL= $100,000

3. Acid ratio

ACID RATIO = CURRENT ASSETS - INVENTORY - PREPAID EXPENSES/CURRENT LIABILITIES

ACID RATIO = ($300,000 - $110,000 - $35,000)/$200,000

ACID RATIO = 0.775 Times

4. Receivable turnover

RECEIVABLE TURNOVER = CREDIT SALES/AVERAGE RECEIVABLE

RECEIVABLE TURNOVER = $750,000/$75,000

RECEIVABLE TURNOVER = 10 Times

<u>Working</u>

AVERAGE RECEIVABLE = (Opening receivables+Closing receivables)/2

AVERAGE RECEIVABLE = ($55,000 + $95,000) / 2 = $75,000

5. Inventory Turnover

INVENTORY TURNOVER = COST OF GOODS SOLD / AVERAGE INVENTORY

INVENTORY TURNOVER = $400,000 / $100,000

INVENTORY TURNOVER = 4 Times

<u>Working</u>

AVERAGE INVENTORY = (Opening inventories+Closing inventories)/2

AVERAGE INVENTORY = (110,000 + 90,000)/2

AVERAGE INVENTORY = $100,000

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2 years ago
Pie Co. uses the installment sales method to recognize revenue. Customers pay the installment notes in 24 equal monthly amounts,
Nataliya [291]

Answer:

C. The present value of the remaining monthly payments discounted at 12%.

Explanation:

To answer the question I have used following values to workout

Original Sales Value = 500,000

Interest rate  = 12%

Numbers of periods = 24

First I calculate the Equal annual installment payment by using following excel formula

=PMT(rate,nper,pv,[fv],[type])

Where

PMT = Equal Annual Payment

rate = Interst rate = 12%/12 = 1%

nper = Tota numbers of payment = 24 payments

pv = oroginal sales value = 500,000

FV = Value outstanding after 24 payments = 0

Type = The payment made at the start or end of the year ( 0 for the payment made at the end of the period and 1 for the payment made at the beginning of the period ) = 0

placing values in the formula

=PMT(1%,24,50,000,0,0)

= $23,536.74  

Now use these values to make the schedule which is attached with this answer.

After six Payment

Outstanding value = 385,961.72  

Original sales price = 500,000

Percentage of outstanding balance to original sales value = 385,961.72 / 500,000 = 0.77 = 77%

The reamining balance is above 75% of the original sales price.

Note:

A payment schedule is attached for reference

Download pdf
3 0
3 years ago
According to state agencies that monitor day care facilities, a typical sanitation requirement is that one toilet and handwashin
kompoz [17]
After the word every the answer would be "students"

Final answer,

According to state agencies that monitor day care facilities, a typical sanitation requirement is that one toilet and handwashing fixture be provided for <span>every student</span>


6 0
2 years ago
The following information pertains to JAE Corp. at January 1, 2018:
son4ous [18]

Answer:

Issued shares =5000

Outstanding shares = 4700

Explanation:

Jan-1 Issued shares = 2000 shares

During year 3000 shares were issued.

a.) Outstanding shares =?

we know that Outstanding shares = issued stock -repurchased shares- treasury stock

                =   2000+3000-500+200

                = 4700 shares.

b.) Shares of common stock issued=?

     Number of issued shares = 2000+3000 = 5000 shares.

    Number of outstanding shares will always be less than issued shares.

8 0
3 years ago
A company that loans money to an organization is a(n):______.a. supplier.b. lender.c. shareholder.d. investor.
fomenos

Answer:

lender.

Explanation:

A lender is an individual or company that makes funds available another com[any. Lenders receive fixed payments based on a predetermined rate at an agreed time.

A shareholder is the owner of a company. A shareholder is a person who buys the stock of a publicly traded company

Supplier provides raw materials needed for production to a company

An investor can either be a lender or shareholder

6 0
3 years ago
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