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3 years ago

Calculate working capital based on the following:

Business

1 answer:

Georgia [21]3 years ago

6 0

Answer:

Working capital $550,000

Explanation:

Given that

The Current ratio is 2:1

Inventory is $200,000

And, the quick ratio is 1:7

Now as we know that

Current ratio = Current assets ÷ current liabilities

2.1 = Current assets ÷ current liabilities

2.1 current liabilities = current assets

And, the quick ratio is

Quick ratio ÷ quick assets ÷ current liabilities

1.7 = (Current assets - inventory) ÷ current liabilities

1.7 = (Current assets - $200,000) ÷ current liabilities

1.7 current liabilities = current assets - $200,000

Now put the value of current liabilities

1.7 current liabilities = 2.1 current liabilities - $200,000

$200,000 = 2.1 current liabilities - 1.7 current liabilities

$200,000 = 0.4 current liabilities

So, current liabilities

= $200,000 ÷ 0.4

= $500,000

Now the current assets = 2.1 × $500,000

= $1,050,000

Now the working capital is

= Current assets - current liabilities

= $1,050,000 - $500,000

= $550,000

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Answer:

The gain that Sheridan should recognize on this exchange is $135000

Explanation:

Where Exchange Transaction lacks commercial substance, the asset that is acquired is measured at the Carrying Amount or Undepreciated Cost of the asset given up.

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Entries to record the exchange are as follows :

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Gain on exchange $135000 (credit)

Conclusion :

The gain that Sheridan should recognize on this exchange is $135000

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4 years ago

The Reading Co. has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 3 percent annua

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Answer:

$1.07

Explanation:

In this question ,we use the formula which is shown below:

A = P × (1 + r ÷ 100)^n

where,

P = Present value $0.90

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rate =3%

number of years = 6

Now put these values to the above formula

So, the value would be equal to

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We considered all the items so that the correct dividend can come

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3 years ago

Fatima is struggling in her job and is experiencing increased dissatisfaction. She related to you that her manager has been unfa

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Answer:

Explanation:

Affective component is the feeling a person has towards a situation that result from his/her belief about a person or situation.

For instance: a person who works hard and believes hard work earns promotion may feel anger or frustration when he or she works but is not promoted and will be affected in this situation.

This reflects Fatima feeling towards her manager when her colleague who deserved less promotion than she did was promoted, she was affected when this happened which is why she doesn't like her manager.

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3 years ago

Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $15,000 (original cost of $34,000 l

Vesnalui [34]

Answer:

a. Gain on sale of land = $230,000

b. Loss on the exchange of the tractor = $5,400

c-1. Gain on Exchange of the tractor = $5,000

c-2. Initial value of new tractor = $35,600

Explanation:

a. What is the amount of gain or loss that Kapono would recognize on the exchange of the land?

This can be determined as follows:

Details Amount $

Fair value of land 760,000

Book value of land (530,000)

Gain (loss) on sale of land 230,000

b. What is the amount of gain or loss that Kapono would recognize on the exchange of the tractor?

This can be determined as follows:

Details Amount $

Original Cost of Tractor 34,000

Accumulated Depreciation (19,000)

Book Value of Tractor 15,000

Therefore, we have:

Loss on Exchange of the tractor = Fair value - Book Value of Tractor = $9,600 - $15,000 = $5,400

c. Assume the fair value of the old tractor is $20,000 instead of $9,600. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?

c-1. Calculation of the amount of gain or loss that Kapono would recognize on the exchange

From part b, we have:

Book Value of Tractor = $15,000

And, we have:

Fair Value = $20,000

Therefore, we have:

Gain on Exchange of the tractor = Fair value - Book Value of Tractor = $20,000 - $15,000 = $5,000

c-2. Calculation of the initial value of the new tractor

This can be determined as follows:

Initial value of new tractor = Fair Value of tractor given + Cash paid = $9,600 + $26,000 = $35,600

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