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Shirlen Company Has the Following Partial List of Account Balances

question 59

Essay

Shirlen Company has the following partial list of account balances at year end:
Required:
A.Compute the current ratio.
B.Determine the amount of working capital.
C.Assume that cash is used to pay the balance due on trade payables.
1.Compute the new current ratio.
2.Compute the new amount of working capital.
D.Compute the trade payables turnover.


Definitions:

Debtor

A person, company, or country that owes money.

Surety

A surety involves a third party agreeing to take on the obligation of paying back a debt or performing a duty if the primary obligor fails to do so.

Creditor

A person or entity to whom money is owed by another entity, known as the debtor, for goods, services, or loans provided.

Debtor's Debt

The obligation of money owed by a debtor to a creditor.

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