Use the Financial Data Shown Below to Calculate the Following

question 132

Essay

Use the financial data shown below to calculate the following ratios for the current year:
(a) Current ratio
(b) Acid-test ratio
(c) Accounts receivable turnover
(d) Days' sales uncollected
(e) Inventory turnover
(f) Days' sales in inventory
$\begin{array}{|l|c|c|}\hline \text { Income statement data } & \\\hline \text { Sales } & \$ 650,000 \\\hline \text { Cost of goods sold } & 425,000 \\\hline \text { Income before taxes } & 78,000 \\\hline \text { Net income } & 54,600 \\\hline\\\hline & \begin{array}{c}\text { Ending } \\\text { Balances }\end{array} & \begin{array}{c}\text { Beginning } \\\text { Balances }\end{array} \\\hline \text { Cash } & \$ 19,500 & \$ 15,000 \\\hline \text { Accounts receivable (net) } & 65,000 & 60,000 \\\hline \text { Inventory } & 71,500 & 64,500 \\\hline \text { Plant and equipment (net) } & \underline{195,000} & \underline{183,900} \\\hline \text { Total assets } & \$ 351,000 & \$ 323,400 \\\hline\\\hline \text { Current liabilities } & \$ 62,400 & \$ 52,700 \\\hline \text { Long-term notes payable } & 97,500 & 100,000\\\hline\end{array}$

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