Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 17, Problem 6QS
(a)
To determine
Compute
(b)
To determine
Compute acid test ratio for Company P.
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Pritchett Company reported the following year-end data:
Cash
$ 15,000
Short-term investments
5,000
Accounts receivable (current)
8,000
Inventory
20,000
Prepaid (current) assets
6,000
Total current liabilities
20,000
Compute the (a) current ratio and (b) acid-test ratio.
Compute the current ratio.
Current Ratio
Numerator:
/
Denominator:
=
Current Ratio
/
=
Current ratio
/
=
to 1
Compute the acid-test ratio.
Acid-Test Ratio
Numerator:
/
Denominator:
=
Acid-Test Ratio
+
+
/
=
Acid-test ratio
+
+
/
=
to 1
Pritchett Company reported the following year-end data:
Cash
Short-term investments
Accounts receivable (current)
Inventory
Prepaid (current) assets
Total current 1iabilities
$ 20, 100
8, 500
13,400
24, 000
6,800
28, 000
Compute the (a) current ratio and ( acid-test ratio.
Complete this question by entering your answers in the tabs below.
Currlat Ratio Acid Test Ratio
Compute the current ratio.
Current Ratio
Current Ratio
Numerator:
Denominator:
Current assets
Current liabilities
Current ratio
72.800
%24
28,000
2.6 to 1
%3
Acid Test Ratio>
Pritchett Co. reported the following year-end data:
Cash $20,200
Short-term investments $ 8,600
Accounts receivable (current) $11,800
Inventory $28,600
Other current assets $12,000
Total current liabilities $29,000
Compute the (a) current ratio
Chapter 17 Solutions
Principles of Financial Accounting.
Ch. 17 - A companys sales in the prior year were 300,000...Ch. 17 - Prob. 2MCQCh. 17 - What is Ella Companys acid-test ratio? a. 2.39 b....Ch. 17 - Prob. 4MCQCh. 17 - What is Ella Companys equity ratio? a. 25.78% b....Ch. 17 - Explain the difference between financial reporting...Ch. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQ
Ch. 17 - Why is working capital given special attention in...Ch. 17 - What does the number of days sales uncollected...Ch. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 11DQCh. 17 - Prob. 12DQCh. 17 - Prob. 13DQCh. 17 - Refer to Apples financial statements in Appendix...Ch. 17 - Prob. 15DQCh. 17 - Prob. 16DQCh. 17 - Use Samsungs financial statements in Appendix A to...Ch. 17 - Prob. 1QSCh. 17 - Identify which standard of comparison, (a)...Ch. 17 - Prob. 3QSCh. 17 - Prob. 4QSCh. 17 - Prob. 5QSCh. 17 - Prob. 6QSCh. 17 - Mifflin Co. reported the following for the current...Ch. 17 - Prob. 8QSCh. 17 - Prob. 9QSCh. 17 - Prob. 10QSCh. 17 - Prob. 11QSCh. 17 - Prob. 12QSCh. 17 - Prob. 13QSCh. 17 - Prob. 14QSCh. 17 - Which of the following gains or losses would...Ch. 17 - Building blocks of analysis Match the ratio to the...Ch. 17 - Prob. 2ECh. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Prob. 6ECh. 17 - Refer to Simon Companys balance sheets in Exercise...Ch. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - Prob. 12ECh. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 15ECh. 17 - Prob. 16ECh. 17 - In the current year, Randa Merchandising, Inc.,...Ch. 17 - Use the financial data for Randa Merchandising,...Ch. 17 - Selected comparative financial statements of...Ch. 17 - Selected comparative financial statements of...Ch. 17 - Prob. 3APCh. 17 - Selected current year-end financial statements of...Ch. 17 - Comparative ratio analysis Summary information...Ch. 17 - Selected account balances from the adjusted trial...Ch. 17 - Prob. 1BPCh. 17 - Prob. 2BPCh. 17 - Prob. 3BPCh. 17 - Prob. 4BPCh. 17 - Summary information from the financial statements...Ch. 17 - Prob. 6BPCh. 17 - Prob. 17SPCh. 17 - Use Apples financial statements in Appendix A to...Ch. 17 - Prob. 2AACh. 17 - Prob. 3AACh. 17 - Prob. 1BTNCh. 17 - Prob. 3BTNCh. 17 - Prob. 5BTN
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- Pritchett Company reported the following year-end data: Cash $ 20,000 Short-term investments 8,400 Accounts receivable (current) 14,800 Inventory 17,600 Prepaid (current) assets 6,700 Total current liabilities 27,000 Compute the (a) current ratio and (b) acid-test ratio.arrow_forwardThe condensed financial statements of Ivanhoe Company for the years 2020-2021 are presented below: (See Images) Compute the following financial ratios by placing the proper amounts for numerators and denominators. (Round per unit answers to 2 decimal places, e.g. 52.75.) (a) Current ratio at 12/31/21 $ $ (b) Acid test ratio at 12/31/21 $ $ (c) Accounts receivable turnover in 2021 $ $ (d) Inventory turnover in 2021 $ $ (e) Profit margin on sales in 2021 $ $ (f) Earnings per share in 2021 $ (g) Return on common stockholders’ equity in 2021 $ $ (h) Price earnings ratio at 12/31/21 $ $ (i) Debt to assets at 12/31/21 $ $ (j) Book value per share at 12/31/21 $arrow_forwardThe following data are taken from the balance sheet at the end of the current year. Determine the (a) working capital, (b) current ratio, and (c) quick/acid-test ratio. Present figures used in your computations. Round ratios to the nearest tenth. Accounts payable $145,000 Accounts receivable 110,000 Accrued liabilities 4,000 Cash 80,000 Income tax payable 10,000 Inventory 140,000 Marketable securities 250,000 Notes payable, short-term 85,000 Prepaid expenses 15,000 ANSWERS: (a) (b) (c)arrow_forward
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