Question

Effect of transactions on liquidity measures. Selected balance sheet accounts for Tibbetts Company on September 30, 2013, are as follows:
Cash....................................................................................... $ 96,000
Marketable securities............................................................. 174,000
Accounts receivable, net....................................................... 258,000
Inventory.............................................................................. 270,000
Prepaid expenses.................................................................. 42,000
Total current assets............................................................... $840,000
Accounts payable................................................................. $294,000
Other accrued liabilities....................................................... 66,000
Short-term debt.................................................................... 120,000
Total current liabilities......................................................... $480,000

Required:
a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2013.
b. Summarized here are the transactions/events that took place during the fiscal year ended September 30, 2014. Indicate the effect of each item on Tibbetts Company's working capital, current ratio, and acid-test ratio. Use + for increase, − for decrease, and (NE) for no effect.



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  • CreatedOctober 05, 2013
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