A. 6%
Calculator entries are N = 10, PV = -1,055.84, PMT = 60, FV = 1,100, CPT I/Y 6
The current ratio will remain the same as 1 only
The acid-test ratio will decrease.
- The current ratio will stay the same because there won't be a change in current liabilities, and the change in current assets won't have any net consequences because the asset will grow due to an increase in inventory, but it will also decrease by the same amount due to a decrease in cash, so the current ratio will stay the same.
- The acid-test ratio will decline since the numerator will shrink owing to a cash shortage, and the growth in inventory won't be taken into account because current assets aren't included in this ratio.
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Answer:
Current Asset = $50,000
Explanation:
Current asset is the asset that can be converted to cash within a year or a short period.
Wicked Wicker Company
Current Assets
Cash $ 26,000
Accounts receivable 17,000
Prepaid insurance <u> 7,000</u>
Total current assets $50,000
Cash is the most liquid asset, so it is a current asset. Accounts receivable can also be collected within a year. So, it is also an existing asset. Insurance is taken for one year in advance; hence, it is a current asset.
Answer:
Explanation:
In this scenario, we compare the values between book value and the fair value of equipment, the difference would be the loss on impairment of the asset
In mathematically,
= Book value - fair value
where,
Book value = Equipment cost - accumulated depreciation
= $672,000 - $174,000
= $498,000
And, the fair value is $384,000
Now put these values to the above formula
So, the value would equal to
= $498,000 - $384,00
= $114,000
Now the journal entry would be
Loss on impairment A/c Dr $114,000
To Accumulated depreciation A/c $114,000
(Being the impairment loss is recorded)
