Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Chapter 11, Problem 11.11P
Problem 11.11
LO 1
Review problem-understanding liquidity measures Assume that the
- How much does the firm have in current liabilities?
- If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory?
- If the firm collects an account receivable of $300,000, what will its new current ratio and working capital be?
- If the firm pays an account payable of $300,000, what will its new current ratio and working capital be?
- If the firm sells inventory that was purchased for $150,000 at a cash price of $180,000, what will its new acid-test ratio be?
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Problem 11-15 (Algo) Review problem-understanding liquidity measures LO 11-1
Assume that the current ratio for Arch Company is 3.0, its acid-test ratio is 1.5, and its working capital is $360,000. Answer each of the
following questions independently, always referring to the original information.
Required:
a. How much does the firm have in current liabilities?
Note: Do not round intermediate calculations.
b. If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise
Inventory, how much does the firm have in Merchandise Inventory?
Note: Do not round intermediate calculations.
c. If the firm collects an account receivable of $118,000, what will its new current ratio and working capital be?
Note: Round "Current ratio" to 1 decimal place.
d. If the firm pays an account payable of $57,000, what will its new current ratio and working capital be?
Note: Do not round intermediate calculations. Round "Current ratio" to 1 decimal place.
e.…
Problem 11-15 (Algo) Review problem-understanding liquidity measures LO 11-1
Assume that the current ratio for Arch Company is 2.5, its acid-test ratio is 2.0, and its working capital is $330,000. Answer each of the
following questions independently, always referring to the original information.
Required:
a. How much does the firm have in current liabilities?
Note: Do not round intermediate calculations.
Problem 11-11 (Algo) Review problem-understanding liquidity measures LO 1
Assume that the current ratio for Arch Company is 2.5, its acid-test ratio is 1.5, and its working capital is $390,000. Answer
each of the following questions independently, always referring to the original information.
Required:
a. How much does the firm have in current liabilities? (Do not round intermediate calculations.)
b. If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise
Inventory, how much does the firm have in Merchandise Inventory? (Do not round intermediate calculations.)
c. If the firm collects an account receivable of $117,000, what will its new current ratio and working capital be? (Round
"Current ratio" to 1 decimal place.)
d. If the firm pays an account payable of $53,000, what will its new current ratio and working capital be? (Do not round
intermediate calculations. Round "Current ratio" to 1 decimal place.)
e. If the firm sells…
Chapter 11 Solutions
Accounting: What the Numbers Mean
Ch. 11 - Prob. 11.1MECh. 11 - Calculate activity measures The following...Ch. 11 - Prob. 11.3MECh. 11 - Prob. 11.4MECh. 11 - Prob. 11.5ECh. 11 - Exercise 11.6 Obtain an annual report and discuss...Ch. 11 - Exercise 11.7 Effect of transactions on various...Ch. 11 - Prob. 11.8ECh. 11 - Prob. 11.9PCh. 11 - Problem 11.10 LQ 9 Prepare a common size balance...
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