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trapecia [35]
3 years ago
10

Assuming an acid-test ratio of 1.0, how will the purchase of inventory with cash affect the ratio?

Business
1 answer:
docker41 [41]3 years ago
6 0

Answer:

C) Decrease the acid-test ratio

Explanation:

The quick ratio is also called acid test ratio. It is a liquidity ratio that measures level of liquid assets of a business.

That is the amount of cash or near cash assets it has to settle it's current debt.

Mathematically

Quick ratio = (Current assets - Inventory) ÷ Current liabilities

If cash (current asset) is used to buy Inventory. Cash will reduce and inventory will increase.

The value of (Current asset - Inventory) reduces.

As the numerator in the ratio reduces, the quick ratio also reduces.

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Major Co. reported 2016 income of $303,000 from continuing operations before income taxes and a before-tax loss on discontinued
Mama L [17]

Answer: $109,080; $145,920

Explanation:

Based on the information that have been provided in the question, the following can be gotten:

The amount for income tax expenses will be:

= 36% of $303,000

= 36/100 × $303,000

= 0.36 × $303,000

= $109,080

The net income will be:

Reported income = $303,000

Less income tax = $109,080

Less loss on discounted operation = $48,000

Net income = $145,920

Loss on discounted operation:

= $75,000 × (1 - 36%)

= $75,000 × (1 - 0.36)

= $75,000 × 0.64

= $48,000

3 0
3 years ago
M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and
8090 [49]

Answer:

a) 100 units

b) 2.5 order per year

c) 50 units

Explanation:

Given data:

demand 250 units

order cost is $20

holding cost $1

a) Economic order quantity EOQ = \sqrt{\frac{2\times demand \times order\ cost}{holding \ cost}}

EOQ = \sqrt{\fac{2\times 250 \times 20}{1}} =100 units

b) number of order for each year = \frac{annual/ demand}{EOQ}

                                                    = \frac{250}{100} = 2.5order/ year

c) average inventory = \frac{Q}{2} = \frac{100}{2} =  50 units

3 0
3 years ago
The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicat
just olya [345]

Answer:

Predetermined manufacturing overhead rate= $22.2 per direct labor hour

Explanation:

Giving the following information:

Fixed manufacturing overhead= $127,840 per month

Estimated direct labor hours= 9,400

The variable overhead rate is $8.60 per direct labor hour

<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (127,840 / 9,400) + 8.6

Predetermined manufacturing overhead rate= $22.2 per direct labor hour

7 0
2 years ago
Why does the kyoto protocol allow a less-developed nation such as china to be exempt from some limits on emissions of greenhouse
OLga [1]
Economic development depends on industrial growth, which may increase greenhouse gas emissions. Hope this was helpful (:
5 0
3 years ago
Financial intermediaries
Lesechka [4]
1.d.exacerbate all of the problems caused by asymmetric information
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3 years ago
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