Moore Company Has the Following Partial List of Account Balances

question 7

Essay

Moore Company has the following partial list of account balances at year-end:
$$\begin{array} { l r } \text { Accounts payable } & \$ 1,500 \\\text { Accounts receivable } & 4,600 \\\text { Cost of goods sold } & 3,200 \\\text { Cash } & 23,000 \\\text { Taxes payable } & 10,000 \\\text { Land } & 25,000 \\\text { Notes payable (due in } 6 \text { months) } & 1,000 \\\text { Salaries payable } & 900 \\\text { Inventory } & 4,300\end{array}$$ Requirements:
A.Compute the quick ratio.
B.Determine the amount of working capital.
C.Assume that cash is used to pay the balance due on accounts payable.
1.Compute the new quick ratio.
2.Compute the new amount of working capital.
D.Compute the accounts payable turnover ratio (use year-end amounts,)

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Definitions:

Accounts Receivable

Debts that customers owe a business for delivered goods or services awaiting payment.

Average Collection Period (ACP)

A financial metric that measures the average number of days it takes for a company to collect payments from its credit sales.

Sales Projection

An estimate of the future sales figures of a product or service, based on market research, historical data, and other predictive techniques.

Accounts Receivable

Unsettled payments from clients to a company for goods or services that have been offered but not yet paid for.