Botany Clothiers reported the following amounts in its 2014 financial statements. The 2013 figures are given for
Question:
2013 figures are given for comparison.
Requirements
1. Compute Botany's acid-test ratio at the end of 2014. Round to two decimal places. How does the acid-test ratio compare with the industry average of 0.95?
2. Compare Botany's days' sales in receivables measure for 2014 with the company's credit terms of net 30 days.
Transcribed Image Text:
2014 2013 Current assets: Cash Short-term investments Accounts receivable $ 9,000 12,000 S 7,000 10,000 $60,000 $54,000 Less allowance for uncollectibles Inventory Prepaid insurance Total current assets 5,000) 55,000 (5,000) 49,000 172,000 1,000 $239,000 $ 70,000 750,000 170,000 1,000 $247,000 $ 80,000 $803,000 Total current liabilities Net sales
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Related Book For
Financial Accounting
ISBN: 978-0133472264
5th Canadian edition
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin
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