All categories

3 years ago

Question 26

Business

1 answer:

irakobra [83]3 years ago

4 0

Answer:

3.50 and 0.90

Explanation:

Calculation for the current ratio and acid-test ratio for the boutique

Calculation of CURRENT RATIO

First step is to calculate the current assets and current liabilities

CURRENT ASSETS

Cash 52,000

Short-term investment 12,000

Accounts receivable 54,000

Inventory 325,000

Prepaid expenses 17,500

Total current assets $ 460,500

CURRENT LIABILITIES

Accounts payable$ 106,500

Other current payables $ 25,000

Total current liabilities $ 131,500

Using this formula

Current ratio=Current assets/Current Liabilities

Let plug in the formula

Current ratio=460,500/131,500

Current ratio=3.50

Therefore the Current ratio will be 3.50

Calculation for CURRENT ACID -TEST RATIO

Using this formula

Current acid-test ratio=Quick assets/Current Liabilities

Let plug in the formula

Current acid-test ratio=460,500-(325,000+17,500)/131,500

Current acid-test ratio=118,000/131,500

Current acid-test ratio=0.90

Therefore the Current acid-test ratio will be 0.90

You might be interested in

Fresnas Designs Inc. is a company known for its quality interior decorations, customized service, and affordable prices. Given t

kicyunya [14]

Answer:

Earning Satisfactory Profits

Explanation:

Based on the information provided within the qeustion it seems that the management of Fresnas Designs Inc. bases its pricing policy on Earning Satisfactory Profits. This is basically when a company revolves all their decisions around trying to make a reasonable level of profits that is consistent with the level of risk that they face. Which is what Fresnas is doing by pricing their products reasonably as opposed to pricing them higher even thought hey can.

8 0

3 years ago

Marshall Inc. recently hired your consulting firm to improve the company's performance. It has been highly profitable but has be

dezoksy [38]

Answer:

148.02 days

Explanation:

The computation of the cash conversion cycle is shown below:

As we know that

Cash conversion cycle is = Days inventory outstanding + days sale outstanding - days payable outstanding

where,

Number of days inventory outstanding is

= Average inventory ÷ cost of goods sold per day

= $75000 ÷ ($360,000 ÷ 365 days)

= 76.04 days

Number of days sales outstanding is

= Average account receivable ÷ Average sales per day

= $160,000 ÷ ($600,000 ÷ 365)

= 97.33 days

And, the number of days payable outstanding is

= Average accounts payable ÷ cost pf goods sold per day

= $25,000 ÷ ($360,000 ÷ 365)

= 25.35 days

So, the cash conversion cycle is

= 76.04 days + 97.33 days - 25.35 days

= 148.02 days

3 0

3 years ago

On June 1, Norma Company signed a 12-month lease for warehouse space. The lease requires monthly rent of $550, with 4 months pai

Sati [7]

Answer:

Balance = $1,650

Explanation:

As Norma company has paid 4 months rent in advance, therefore at the end of June, norma company will record its 1-month expense as follows

Adjusting entry at the end of June would be

DEBIT CREDIT

Entry

Rent Expense $550

Prepaid Rent $550

The balance on Norma's prepaid expense would be

Prepaid Rent = $2200

Rent Expense = ($550)

Balance = $1,650

7 0

3 years ago

The market risk, beta, of a security is equal to Group of answer choices the variance of the security's returns divided by the c

GaryK [48]

Answer:

the covariance between the security's return and the market return divided by the variance of the market's returns

Explanation:

The market risk, beta of the security would be equivalent to the

Beta = Cov(rm, rs) ÷ Var(rm)

Rm denotes market return

rs denotes security return

Cov denotes covariance

Var denotes variance

Hence, the second option is correct

And, the rest of the options are wrong

3 0

3 years ago

If a researcher were to ask consumers to quickly name the top 3 brands of computers they might consider purchasing, the most com

Murrr4er [49]

Answer:

C. Evoked Set

Explanation:

Evoked set simply describes a set of brand that comes to a buyer's mind when a thinks of buying a product. They are brands that customers are aware of and when they consider buying a product, they think of those they are aware of. A good example is the one asked in the question, when a customer thinks about buying a computer, the brands that he's aware of and think about would most likely be Dell, Apple and Hp. In marketing, achieving evoked set is the wish of every marketer of a particular brand. This is because, these categories of goods are the ones that are most likely to be purchased. Lots of companies spends a lot in advertising to make it to customers evoked set because of the presumed benefits that comes with it.

8 0

3 years ago