Compute the following liquidity measures for 2015

Compute the following liquidity measures for 2015

Booker
Corporation had the following comparative current assets and current
liabilities:

Dec.
31, 2015
Dec. 31, 2014

Current
assets

Cash $ 60,000 $ 30,000

Short-term
investments 40,000 10,000

Accounts
receivable 55,000 95,000

Inventory 110,000 90,000

Prepaid
expenses 35,000 20,000

Total
current assets $300,000 $245,000

Current
liabilities

Accounts
payable $140,000 $110,000

Salaries
payable 40,000 30,000

Income
tax payable 20,000 15,000

Total
current liabilities $200,000 $155,000

During 2015,
credit sales and cost of goods sold were $750,000 and $400,000, respectively.


Ex. 209 (Cont.)

Instructions

Compute the
following liquidity measures for 2015:

1. Current ratio.

2. Working capital.

3. Acid-test ratio.

4. Accounts receivable turnover.

5. Inventory turnover.


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