The Current Assets and Current Liabilities for Kolbie Company and Newton

question 145

Essay

The current assets and current liabilities for Kolbie Company and Newton Company are as follows:
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*These represent prepaid expenses and other non-quick current assets.
(a)Determine the quick ratio for both companies.Round to two decimal places.
(b)Interpret the quick ratio difference between the two companies.

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Definitions:

Credit Terms

The conditions under which credit will be extended to a borrower, including repayment schedule, interest rate, and the duration of the loan.

General Journal Entries

A record of financial transactions in the order they occur.

Invoice Price

Invoice Price is the price listed on an invoice for purchased goods or services, including the base cost and added fees or taxes before any discounts.

General Journal Entry

An accounting record where transactions are initially recorded, detailing the accounts that are affected and the amounts, before the details are posted to the appropriate ledgers.