Question

The Core Company had the following assets and liabilities as of December 31: Assets Cash $58,000 Accounts receivable 25,000 Inventory 20,000 Equipment 50,000 Liabilities Current portion of long-term debt $20,000 Accounts payable 12,000 Long-term debt 25,000 Calculate the current ratio, working capital, and quick ratio. If required, round your answers to one decimal place. Current Ratio fill in the blank 1 Working Capital $fill in the blank 2 Quick Ratio fill in the blank 3

Answer 1

Answer:

Current Ratio 3.2

Working Capital $71,000

Quick Ratio 2.6

Explanation:

Calculation to determine Current Ratio, Working Capital and Quick Ratio Correct Answer:

Current Ratio= ($58,000 + $25,000 + $20,000) / ($20,000 + $12,000)

Current Ratio= $103,000/32,000

Current Ratio = 3.2

Working Capital= $103,000 - $32,000

Working Capital= $71,000

Quick Ratio=($58,000 + $25,000) / ($20,000 + $12,000)

Quick Ratio=$83,000/$32,000

Quick Ratio= 2.6

Therefore:

Current Ratio 3.2

Working Capital $71,000

Quick Ratio 2.6