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DanielleElmas [232]
3 years ago
5

urrent and Quick Ratios The Nelson Company has $1,250,000 in current assets and $500,000 in current liabilities. Its initial inv

entory level is $400,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.2
Business
1 answer:
charle [14.2K]3 years ago
4 0

Answer: $3,250,000

Explanation:

The Current Ratio is used to calculate if the company's current assets can pay off it's current Liabilities.

It is calculated by dividing Current Assets by Current Liabilities.

The company plans to increase it's note payable to enable it but more Inventory. We can therefore assume that the increase in notes Payable (current Liability) will be the same as the increase in inventory (current asset) since the former is funding the latter.

The company does not want the current Ratio dropping below 1.2 so 1.2 is the ideal ratio.

The formula will therefore be;

1.2 = (Current Assets + Change in Notes Payable ) / Current Liabilities + Change in Notes Payable

1.2 = (1,250,000 + Change in Notes Payable) / 500,000 + Change in Notes Payable

600,000 + 1.2(Change in Notes Payable) = 1,250,000 + Change in Notes Payable

1.2( Change in Notes Payable) - Change in Notes Payable = 1,250,000 - 600,000

0.2 (Change in Notes Payable) = 650,000

Change in Notes Payable = $3,250,000

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Bonita Industries reported the following year-end information: beginning work in process inventory, $190000; cost of goods manuf
Lunna [17]

Answer:

Bonita Industries's cost of goods sold for the year is $844,000

Explanation:

Beginning work in process inventory, $190000

Ending work in process inventory, $230000

Cost of goods manufactured, $866000

Beginning finished goods inventory, $252000

Ending finished goods inventory, $274000

Cost of Goods Sold = Beginning Finished Goods Inventory + Cost of Goods Manufactured – Ending Finished Goods Inventory

Cost of Goods Sold = $252000 + $866000 - $274000

Cost of Goods Sold = $844000

*Beginning work in process inventory and Ending work in process inventory has already been dealt in cost of goods manufactured calculations.

4 0
3 years ago
If consumers are willing to pay a higher price than previously for each level of output, we can say that _______ has occurred. A
Nady [450]

Hey there!!

The correct answer is Option A. an Increase in supply

Hope this helped and I wish you the best in luck! (:

6 0
3 years ago
The concept referring to the rights inherent in a supervisory position to give orders and expect the orders to be obeyed is:____
Snowcat [4.5K]

The concept referring to the rights inherent in a supervisory position to give orders and expect the orders to be obeyed is---- Authority

What is the concept of authority?

Authority can be defined as the legal right of a person or superior to command his subordinates. On the other hand, accountability refers to the duty of an individual to carry out his performance as per the company standards. The direction of the flow of authority is from the superiors to subordinates.

What is authority in a person?

a person who has authority over another person : a person who has the power to give orders or make decisions A child needs a figure of authority in his or her life.

Why is it important to have authority?

Authority can be used to protect our rights to life, liberty, and property. Authority can be used to provide order and security in people's lives. For example, air traffic controllers prevent accidents and provide safety for airplane passengers. Authority can be used to manage conflict peacefully and fairly.

Supervisory position :

Supervisory position means a position in which an employee directs staff members and manages a function, program or support service. Supervisory position means a position, the assigned duties of which include the supervision of a work unit of a department.

Learn more about supervisory position :

brainly.com/question/18634602

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5 0
2 years ago
The quantity theory of money holds that:______.
N76 [4]

Answer and Explanation:

The quantity theory of money talks about money supply and price level, and their relationship with one another.

In any given economy, the quantity Theory of money states that money supply and price level are directly proportional. This is to say that when there is a change such as an increase in money supply, there would also be a proportional increase in price Ievel. Also when there is an increase in price level, there would also be a proportional increase in money supply.

4 0
3 years ago
You are in talks to settle a potential lawsuit. The defendant has offered to make annual payments of $35,000, $39,000, $80,000,
storchak [24]

Answer:

The value of the settlement today =  $231,897.79  

Explanation:

The value of the settlement today is the sum of the present value (PV) of cash inflows discounted at the discount rate of 5.7 %.

Year                                                   PV

1              35,000 × 1.057^(-1)   = 33112.58

2                39,000× 1.057^(-2) = 34907.16

3.               80,000× 1.057^(-3)  = 67743.09

4                 120,000 × 1.057^(-4) =96134.94

The Pv of the total cash in flow =33,112.58  +  34,907.17  +  67,743.09  +  96,134.95  =  231,897.79  

The value of the settlement today =  $231,897.79  

7 0
3 years ago
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