Selected Financial Statement Data for Freeman Company Are Presented Below

question 125

Essay

Selected financial statement data for Freeman Company are presented below. $\begin{array}{lr}&12/31/17\\\text { Cash } & \$ 10,000 \\\text { Short-term investments } & 20,000 \\\text { Accounts receivable } & 60,000 \\\text { Inventories } & 75,000 \\\text { Total current liabilities } & 100,000\end{array}$ Instructions
Compute the following ratios at December 31 2017:
(a) Current.
(b) Acid-test.

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Definitions:

Ending Inventory

The total value of all the goods a company has in stock at the end of a financial period, which have not yet been sold or used in production.

Recent Cost

The latest cost incurred for goods or services, reflecting the most up-to-date pricing information.

Inventory

The total amount of goods and materials held by a company with the intent of resale or as part of the production process.

Profit

The financial gain realized when the revenues generated from business activities exceed the expenses and costs incurred in generating those revenues.