Cole Company Had the Following Accounts and Balances on December

question 88

Essay

Cole Company had the following accounts and balances on December 31, 2016: $\begin{array}{lr}\text { Income Taxes Payable } & \$ 51,250 \\\text { Cash } & 20,000 \\\text { Notes Payable, 10\%, due June 2, } 2017 & 1,000 \\\text { Accounts Receivable } & 267,500 \\\text { Equipment } & 950,000 \\\text { Accounts Payable } & 104,400 \\\text { Inventory } & 85,000 \\\text { Land } & 600,000\\\text { Allowance for Doubtful Accounts } & 12,000 \\\text { Discount on Notes Payable } & 150 \\\text { Notes Receivable, maturity } 2 / 1 / 2023 & 5,000 \\\text { Current Maturities of Long-Term Debt } & 6,900 \\\text { Unearned Revenue } & 4,320 \\\text { Interest Payable } & 1,010 \\\text { Wages Payable } & 6,000 \\\text { Marketable Securities } & 40,000 \\\text { Capital Stock } & 900,000\\\end{array}$ Required:
1.Compute Cole's working capital.
2.Compute Cole's current ratio.What does this ratio indicate about Cole's condition?

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Definitions:

Same Sex Alliance

A partnership, union, or alliance that involves individuals of the same gender; often used in the context of legally recognized relationships or marriages.

CEO

Chief Executive Officer - The highest-ranking executive in a company, responsible for making major corporate decisions and managing the overall operations and resources of the company.

Honor

In banking and finance, refers to the act of accepting or paying a negotiable instrument when it is presented.

Postdated Check

A check written with a date in the future, preventing it from being cashed or deposited until that date.