Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 7, Problem 28AE
Quick ratio and
Consider the following data
| COMPANY | A | B | C | D |
| Cash........................................... | $ 8,700 | $ 6,600 | $ 1,800 | $10,300 |
| Short-term Investments............. | 6,700 | 3,100 | 1,200 | 4,900 |
| Net Receivables.......................... | 13,400 | 11,000 | 5,400 | 13,500 |
| Total current assets................... | 31,800 | 26,900 | 9,300 | 32,400 |
| Current Liabilities....................... | 20,100 | 10,200 | 4,500 | 37,000 |
Requirements
- 1. Calculate the quick assets and the quick ratio for each company (round your final answers to two decimal places).
- 2. Calculate the current ratio for each company (round your final answers to two decimal places).
- 3. Which company should be concerned about its liquidity?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Indy Furniture CompanyTrial BalanceNovember 30, 2011
Cash . ............................................. $21,800Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,200Finished Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,900Work in Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,400Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000Accumulated Depreciation—Building . .............. $3,000Machinery and Equipment ......................... 88,000Accumulated Depreciation—Mach. and Equip. . ..... 2,200Accounts Payable . ................................. 8,900Payroll . . .......................................... —Capital Stock . . . ................................... 422,550Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .…
Question 3. Purchased computers with a cost of $45,000; $22,000 was paid; the balance is due and is expected to be paid the end of the first quarter of the next fiscal year.
Expenditures—Capital Outlay...............................................................
Cash................................................................................
Vouchers Payable.............................................................
To record purchase of computers.
The following information is from Tejas WindowTint’s financial records.
Month Sales PurchasesApril ........................... $72,000 ............................................................ $42,000May ............................. 66,000 ............................................................ 48,000June ............................ 60,000 ............................................................ 36,000July .............................. 78,000 ............................................................ 54,000
Collections from customers are normally 70 percent in the month of sale, 20 percent in the month following the sale, and 9 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 2 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for August are…
Chapter 7 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 7.A - Prob. 1SECh. 7.A - Prob. 2SECh. 7.A - Prob. 3AECh. 7.A - Prob. 4AECh. 7.A - Prob. 5BECh. 7.A - Prob. 6BECh. 7.A - Prob. 7APCh. 7.A - Prob. 8APCh. 7 - Which duties should be segregated in the...Ch. 7 - Prob. 2DQ
Ch. 7 - Prob. 3DQCh. 7 - Why does the allowance method of accounting for...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - How would the net realizable value of Accounts...Ch. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 1SCCh. 7 - Prob. 2SCCh. 7 - Prob. 3SCCh. 7 - Prob. 4SCCh. 7 - Prob. 5SCCh. 7 - Prob. 6SCCh. 7 - Prob. 7SCCh. 7 - Prob. 8SCCh. 7 - Prob. 9SCCh. 7 - Prob. 10SCCh. 7 - Prob. 11SCCh. 7 - Prob. 12SCCh. 7 - Prob. 1SECh. 7 - Prob. 2SECh. 7 - Prob. 3SECh. 7 - Prob. 4SECh. 7 - Prob. 5SECh. 7 - Prob. 6SECh. 7 - Prob. 7SECh. 7 - Prob. 8SECh. 7 - Prob. 9SECh. 7 - Prob. 10SECh. 7 - Prob. 11SECh. 7 - Prob. 12SECh. 7 - Prob. 13SECh. 7 - Prob. 14SECh. 7 - Prob. 15SECh. 7 - Quick ratio (Learning Objective 7) 510 min....Ch. 7 - Prob. 17SECh. 7 - Prob. 18AECh. 7 - Prob. 19AECh. 7 - Prob. 20AECh. 7 - Prob. 21AECh. 7 - Prob. 22AECh. 7 - Prob. 23AECh. 7 - Prob. 24AECh. 7 - Prob. 25AECh. 7 - Prob. 26AECh. 7 - Prob. 27AECh. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 29AECh. 7 - Prob. 30BECh. 7 - Prob. 31BECh. 7 - Prob. 32BECh. 7 - Prob. 33BECh. 7 - Prob. 34BECh. 7 - Prob. 35BECh. 7 - Prob. 36BECh. 7 - Prob. 37BECh. 7 - Prob. 38BECh. 7 - Prob. 39BECh. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 41BECh. 7 - Prob. 42APCh. 7 - Prob. 43APCh. 7 - Prob. 44APCh. 7 - Prob. 45APCh. 7 - Prob. 46APCh. 7 - Prob. 47APCh. 7 - Prob. 48APCh. 7 - Prob. 49BPCh. 7 - Prob. 50BPCh. 7 - Prob. 51BPCh. 7 - Prob. 52BPCh. 7 - Prob. 53BPCh. 7 - Prob. 54BPCh. 7 - Prob. 55BPCh. 7 - Continuing Exercise In this exercise, we continue...Ch. 7 - Prob. 1CPCh. 7 - Prob. 1CFSAPCh. 7 - Prob. 1EIACh. 7 - Prob. 2EIACh. 7 - Prob. 1FACh. 7 - Prob. 1IACh. 7 - Prob. 1SBACh. 7 - Prob. 1WC
Additional Business Textbook Solutions
Find more solutions based on key concepts
How did the recession of 2007-2009 compare with other recessions since the Great Depression in terms of length?...
Foundations of Financial Management
Questions For Review
12-4. How is the concept of the value package useful in marketing to consumers and industr...
Business Essentials (12th Edition) (What's New in Intro to Business)
E9-15 Identifying and correcting internal control weakness
Learning Objective 1
Suppose The Right Rig Dealers...
Horngren's Accounting (12th Edition)
What is a beta? How is it used to calculate r, the investor’s required rate of return?
Foundations Of Finance
An experimental composite engine block for an automobile will trim 20 pounds of weight compared with a traditio...
Engineering Economy (17th Edition)
Comparison of projects using Net Present Value. Reasons for the conflicts in ranking using Net Present Value an...
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Below are recorded transactions of Yellow Jacket Corporation for August. Debit Credit1. Equipment........................................................ 8,800 Cash.............................................................. 8,8002. Accounts Receivable..................................... 3,200 Service Revenue....................................... 3,2003. Salaries Expense............................................ 1,900 Cash.............................................................. 1,9004. Cash................................................................... 1,500 Deferred Revenue.................................... 1,5005. Dividends.......................................................... 900…arrow_forwardThe following information came from a recent balance sheet of Apple Computer, Inc.:End of Year Beginning of YearAssets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53.9 billion $39.6 billionLiabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.0 billion ?Owners’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? $21.0 billiona. Determine the amount of total liabilities reported in Apple Computer ’s balance sheet at thebeginning of the year.b. Determine the amount of total owners’ equity reported in Apple Computer ’s balance sheet atthe end of the year.c. Retained earnings was reported in Apple Computer ’s year-end balance sheet at $19.5 billion.If retained earnings was $13.8 billion at the beginning of the year, determine net income forthe year if no dividends were declared.arrow_forwardConsider the recorded transactions below. Debit Credit 1. Accounts Receivable..................................... 8,400 Service Revenue....................................... 8,4002. Supplies......................................................... 2,300 Accounts Payable .................................... 2,3003. Cash............................................................. 10,200 Accounts Receivable................................ 10,2004. Advertising Expense...................................... 1,000 Cash.............................................................. 1,0005. Accounts Payable........................................... 3,700 Cash.............................................................. 3,7006.…arrow_forward
- Cashbalance,beginning.....................P9 P ? P ? P? P?Add collectionsfromcustomers..... ? ? 125 ? 391Totalcash available................... 85 ? ? ? ?Less disbursements:Purchaseofinventory..................... 40 58 ? 32 ?Operatingexpenses............... ? 42 54 ? 180Equipmentpurchases................... 10 8 8 ? 36Dividends.......................... 2 2 2 2 ?Totaldisbursement.................... ? 110 ? ? ?Excess (deficiency) of cash availableOrdisbursements... ...................... (3) ? 30 ? ? Financing:Borrowings......................... ? 20 - - ?Repayments (including interest)*.. - - (?) (7) (?)Total financing......................... ? ? (?) (?) ?Cash balance, ending................... P ? P ? P ? P ? P ? *Interest will total P4, 000 for the year.arrow_forwardGive answer within 30 min .... I will give you positive rating immediately.... it's very urgent.... thank you...arrow_forward4 Cost of got ld-atatoment. The following data are provided by hé conlroller of Fonsacola Cofporatlon: CAsh. Accounts. rocelyáble.. Inventories: $ 240,000 348,000 ..........il.... ........ .....................p...... ........ Flnished goods. Work In procese. Materlals. Maldrial piurchaopdii.. i. January 1 $64,200, 29,800 88,000 December 31 $88,000 30,800 64,000 ti....... 366,000 8,000 488,400 344,200 Fiatory.overha KOxetuding depreciatiori). Mirkelna, indinobirAlve.xpiņaan(axoludina dgpreciatlon) . biprecia flon (0mandatuhoi, 10% markeling,and, adminia ........... ... . 116,000 1,844,000 523,600 0,800 Salos... Direct labor:e Frelght on materjah purchaed....in....it... 84,000 18,000 .........**** Rantal'Inicome..... Interast on. bondeipayaple ... ........ .....'. (CGAAC adapted) Hoquired: Prepare a cost of goode sold statement:arrow_forward
- Boscia Corporation's balance sheet appears below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents......................... $ 44 $ 38 Accounts receivable .................................. 82 69 Inventory ................................................... 71 69 Plant and equipment .................................. 537 500 Accumulated depreciation......................... ( 240) ( 201) Total assets................................................ $494 $475 Liabilities and stockholders’ equity: Accounts payable ...................................... $ 70 $ 60 Wages payable........................................... 24 21 Taxes payable ............................................ 19 22 Bonds payable ........................................... 226 300 Deferred taxes............................................ 19 18 Common stock........................................... 22 20 Retained earnings...................................... 114 34 Total…arrow_forwardFrom the following list of accounts, calculate the quick ratio.Cash.......................................Accounts receivable................Inventory................................Prepaid insurance ...................$ 2,0007,00017,0001,000Accounts payable ............................Salary payable .................................Notes payable (due in two years) ....Short-term investments....................$ 5,0009,0008,0005,000a. 1.5b. 1.0c. 1.8d. 2.3arrow_forwardThe following changes took place during the year in Pavolik Company’s balance sheet accounts:Cash ................................... $5 D Accounts payable ............ $35 IAccounts receivable ........... $110 I Accrued liabilities ............ $4 DInventory ............................ $70 D Bonds payable ................ $150 IPrepaid expenses .............. $9 I Deferred income taxes .... $8 ILong-term investments ...... $6 D Common stock ................ $80 DPlant and equipment .......... $200 I Retained earnings ........... $54 IAccumulated depreciation .. $(60) ILand ................................... $15 DD Decrease; I Increase.Long-term investments that had cost the company $6 were sold during the year for $16, and land thathad cost $15 was sold for $9. In addition, the company declared and paid $30 in cash dividends during theyear. No sales or retirements of plant and equipment took place during the year.The company’s income statement for the year follows:Sales…arrow_forward
- kk.arrow_forward1. Prepare a November 30 balance sheet in proper form for Green Bay Delivery Service from the following alphabetical list of the accounts at November 30: Accounts receivable.......................$10,000Accounts payable................................18,000Building..............................................28,000Cash..................................................8,000Notes payable.....................................45,000Office equipment...................................12,000R. Perkins, Capital................................?Trucks...............................................55,000arrow_forward19. Using the following information, calculate the return on assets. Net income for November Total assets, November 1 5,000 76,000 Total assets, November 30 80,250 ... Identify the formula and then solve for return on assets (ROA). (Round the ROA to the nearest tenth percent, X.X%.) ÷ ROA %arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Economic Value Added EVA - ACCA APM Revision Lecture; Author: OpenTuition;https://www.youtube.com/watch?v=_3hpcMFHPIU;License: Standard Youtube License