Use the Financial Data Shown Below to Calculate the Following

question 183

Essay

Use the financial data shown below to calculate the following ratios for the current year:
(a)Current ratio
(b)Acid-test ratio
(c)Accounts receivable turnover
(d)Days' sales uncollected
(e)Inventory turnover
(f)Days' sales in inventory
$$\begin{array}{l}\begin{array} { | l | r | r | } \hline \text { Income statenernt data }\\\hline \text { Sales } & \$ 650,000 & \\\hline \text { Cost of goods sold } & 425,000 & \\\hline \text { Income before taxes } & 78,000 & \\\hline \text { Net incorne } & 54,600 & \\\hline & & \\\hline &\begin{array} { c } \text { Ending } \\\text { Balances }\end{array} & \begin{array} { c } \text { Begirning } \\\text { Balances }\end{array} \\\hline \text { Cash } & \$ 19,500 & \$ 15,000 \\\hline \text { Accounts receivable (net) } & 65,000 & 60,000 \\\hline \text { Irventory } & 71,500 & 64,500 \\\hline \text { Plart and equipment (net) } & \underline { 195,000 } & \underline { 183,900 } \\\hline \text { Total assets } & \$ 351,000 & \$ 323,400 \\\hline & & \\\hline \text { Current liabilities } & \$ 62,400 & \$ 52,700 \\\hline \text { Lone-temn notes payable } & 97,500 & 100,000 \\\hline\end{array}\end{array}$$

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Definitions:

Productively Efficient

A situation where goods or services are produced at the lowest possible cost, maximizing the allocation of resources.

Opportunity Cost

The drawback of dismissing the next superior alternative during the decision process.

Real-Life Situations

Scenarios or events that occur outside theoretical or simulated environments, involving genuine contexts and conditions.

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Professionals who study, develop, and apply theories and concepts from economics and write about economic policy.