Before Adjusting Its Current Passive Investments in Equity Securities, Apex

question 100

Essay

Before adjusting its current passive investments in equity securities, Apex Company has total current assets and current liabilities of $23,000 and $12,000, respectively. During the current year, Apex has net income of $200,000 with 50,000 shares of common stock outstanding. This amount excludes the effects of yearend adjustments related to the investments. Included in current assets are equity securities recorded at their original cost of $3,000. However, the current market value of those securities is $4,000 at yearend. If Apex properly accounts for the securities, determine the effect on Apex's current ratio and earnings per share.

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Definitions:

Zone of Indifference

The range within which individuals are indifferent to making a choice between different options because the differences are perceived as minimal.

Authoritative Requests

Demands or commands given by a person in a position of power, which are expected to be followed without question.

Region of Inattention

Areas or aspects that are ignored or overlooked within a certain context, especially in cognitive psychology or information processing.

Coercive Power

The ability to control others through the threat of punishment or the imposition of unpleasant conditions.