The Following Information Applies to Markham Company Additional Information: Net Credit Sales Equal $220,000 and Beginning Accounts

question 74

Essay

The following information applies to Markham Company: $\begin{array}{|l|r|}\hline \text { Assets } \\\hline \text { Cash }& \$ \quad 6,000 \\\hline \text { Accounts receivable } & 13,000 \\\hline \text { Inventory } & 16,000 \\\hline \text { Plant and equipment, net } & 21,000 \\\hline \text { Land } & \underline { 19,000} \\\hline \text { Total assets }& \underline { \$ \quad 75,000 }\\\hline \\\hline \text { Liabilities and stockholders' equity }\\\hline \text { Accounts payable }& \$ \quad5,000\\\hline \text { Salaries payable } & 10,000 \\\hline \text { Bonds payable (due 2020) } & 12,000 \\\hline \text { Capital stock, no par } & 23,000 \\\hline \text { Retained earnings } & \underline { 25,000} \\\hline \text { Total liabilities and stockholders' equity }& \underline { \$ \quad 75,000 }\\\hline\end{array}$ Additional information: Net credit sales equal $220,000 and beginning accounts receivable were $11,000.
Required:
Compute Markham's:
(a)Quick ratio
(b)Current ratio
(c)Working capital
(d)Accounts receivable turnover
(e)Average days to collect receivables
Round your answers to two decimal places.

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Definitions:

Quantity Equation

An equation that relates the quantity of money in an economy to the nominal value of transactions, used in economics to describe the relationship between money supply and price level.

Price Level

A measure of the average prices of goods and services in an economy at a specific time.

Money Supply

The aggregate of financial assets in an economy at a specific moment, which includes cash, coins, and the deposits in checking and savings accounts.

Quantity Equation

An equation that relates the quantity of money in an economy to the level of economic activity, typically framed as MV = PQ.