use the following information given to compute for solvency ratio Directions: Use the following information given by Aysid Wash and Wear Suppliesto compute for Solvency Ratios.CashP 400,000SalesP 1,500,000Accounts Receivable700,000500,000 Cost of Goods Sold550,000Gross ProfitInventory800,000850,000 Operating Expenses300,000EquipmentTotal AssetsOperating income500,000Accounts PayableInterest Expense50,000Net IncomeP 450,000Notes PayableOwner, CapitalTotal Liabilities andequityP 2,300,000P 600,000400,0001,800,000P 2,300,000

The solvency ratio is the ratio that tells about the company's ability to pay its liabilities or…

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Business

Accounting

solvency ratio

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

use the following information given to compute for solvency ratio

Directions: Use the following information given by Aysid Wash and Wear Supplies
to compute for Solvency Ratios.
Cash
P 400,000
Sales
P 1,500,000
Accounts Receivable
700,000
500,000 Cost of Goods Sold
550,000
Gross Profit
Inventory
800,000
850,000 Operating Expenses
300,000
Equipment
Total Assets
Operating income
500,000
Accounts Payable
Interest Expense
50,000
Net Income
P 450,000
Notes Payable
Owner, Capital
Total Liabilities and
equity
P 2,300,000
P 600,000
400,000
1,800,000
P 2,300,000

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