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3 years ago

A company has a cash ratio of 2.3. what does this imply?

1 answer:

3 0

<span>This implies that the company has an unnecessarily large amount of cash supply. Generally cash ratio is defined as ratio of a company's total cash and cash equivalents to its current liabilities.Then cash ratio can be determined by using the formula which is (Cash + Cash equivalents) Ă· Current liabilities.If cash &cash equivalents > current liabilities,it means the company has more cash.If cash &cash equivalents= current liabilities,it means the company has enough cash to pay the liabilities..If cash &cash equivalents<current liabilities,it means company utilized its assets well to earn profits.</span>

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Use the following information for calendar year 2020: Accounts receivable, January 1 $125,000 Credit sales during the year 1,400

Aloiza [94]

Answer:

See below

Explanation:

Given the information above, first we need to compute ending balance of account receivables.

Ending balance of account receivables = Beginning balance + Credit sales - Customer's account collected - Write off amount

= $125,000 + $1,400,000 - $1,350,000 - $0

= $175,000

The year end balance in the allowance for uncollectible account would be

= $175,000 × 10%

= $17,500

Now, the bad debt expense

= Year end balance of allowance for uncollectible account - Beginning balance of allowance for doubtful accounts + Written off

= $17,500 - $15,000 + $0

= $2,500

6 0

2 years ago

Company ABC provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. In add

Vladimir79 [104]

Answer:

Company ABC and Emily, a single filing taxpayer

The maximum amount excludable from Emily's gross income for the dependent care expenses, which Emily can report on her tax return is $3,000.

Explanation:

a) Data and Calculations for Emily:

Dependent care flexible spending arrangement deduction = $4,500

Fair market value of the on-site dependent care used = $700

Form W-2 reported dependent care assistance = $5,200

Maximum amount excludable from Emily's gross income for the dependent care expenses Emily can report on her tax return is $3,000.

b) According to the IRS records, Emily can exclude or deduct dependent care benefits provided by a dependent care benefit plan, an amount not exceeding $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for. Since the number of persons cared for is not disclosed, it is assumed that Emily cared for only one qualifying person. Therefore, $3,000 is the maximum she is allowed to deduct.

4 0

3 years ago

"The gross earnings of factory workers for Dinkel Company during the month of January are $400,000. The employer's payroll taxes

Zepler [3.9K]

Answer and Explanation:

The Journal entry is shown below:-

Factory labor Dr, $480,000

To Factory wages payable $400,000

To Employee payroll taxes payable $80,000

(Being factory labor cost is recorded)

Here we debited the factory labor as it increased the expenses and we credited the factory wages payable and employee payroll taxes payable as it also increased the liabilities

3 0

2 years ago

Ms. Towne is buying a home for $250,000 and is putting down 20% cash on the purchase. She is financing the rest with a 30-yr, fi

kipiarov [429]

Answer:

$180

Explanation:

the monthly payment = principal / annuity factor

principal = $250,000 x 80% = $200,000
PV annuity factor, 360 periods, 0.38542%= 194.4995527

monthly payment = $200,000 / 194.4995527 = $1,028.28

in total, you will pay $1,028.28 x 360 = $370,180.80, so total interests = $370,180.80 - $200,000 = $170,180.80

the biweekly payment = principal / annuity factor

principal = $250,000 x 80% = $200,000
PV annuity factor, 780 periods, 0.178%= 421.62071

monthly payment = $200,000 / 421.62071 = $474.36

in total, you will pay $474.36 x 780 = $370,000.80, so total interests = $370,000.80 - $200,000 = $170,000.80

During the 30 year period, you will be able to save $170,180.80 - $170,000.80 = $180 in interests

3 0

3 years ago

Garcel, Inc. held unfinished inventory at a cost of $85,000 with a sales value of $125,000. The inventory will cost $10,500 to c

fiasKO [112]

Answer:

Explanation:

The following information can be gotten from the question:

Net realizable value (NRV) will be:

= $125,000 - $10,500

= $114,500

Normal profit will be:

= $114,500 - (30% × $125,000)

= $114,500 - $37,500

= $77,000

The amount should Garcel report as inventory on its balance sheet should be $77,000.

6 0

2 years ago

A company has a cash ratio of 2.3. what does this​ imply?

A company has a cash ratio of 2.3. what does this imply?