Use the Balance Sheets of Sando Shown Below to Calculate

question 65

Essay

Use the balance sheets of Sando shown below to calculate the following ratios for 2010 (round to the hundredths):
(a)Current ratio.
(b)Acid-test ratio.
(c)Debt ratio.
(d)Equity ratio.
$\begin{array}{c} \text { Sando Company}\\ \text { Balance Sheets}\\ \text { December 31,2010}\\\begin{array}{|l|r|}\hline \text { Cash } & \$ 43,000 \\\hline \text { Accounts receivable } & 38,000 \\\hline \text { Merchandise inventory } & 61,000 \\\hline \text { Prepaid insurance } & 6,000 \\\hline \text { Long-term investments } & 49,000 \\\hline \text { Plant assets (net) } & 218,000 \\\hline \text { Total assets } & \$ 415,000 \\\hline\\\hline \text { Liabilities and Equity: } & \\\hline \text { Current liabilities } & \$ 62,000 \\\hline \text { Long-term liabilities } & 45,000 \\\hline \text { Common stock } & 150,000 \\\hline \text { Retained earnings } & \underline{158,000} \\\hline \text { Total liabilities and equity } & \$ 415,000\\\hline\end{array}\end{array}$

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