The following items, in alphabetical order, are available from the records of Quinn Corporation as of December
Question:
The following items, in alphabetical order, are available from the records of Quinn Corporation as of December 31, 2012 and 2011:
December 31, 2012 December 31, 2011
Accounts payable.....................$10,500......................................$ 6,500
Accounts receivable...................16,500.......................................26,000
Cash.....................................12,750.......................................11,800
Interest receivable.........................200................................................0
Note receivable, due 12/31/2014....12,000.......................................12,000
Office supplies.............................900.........................................1,100
Prepaid insurance..........................400............................................250
Salaries payable.........................1,800.............................................800
Taxes payable..........................10,000..........................................5,800
Required
1. Calculate the following as of December 31, 2012, and December 31, 2011:
a. Working capital
b. Current ratio
2. On the basis of your answers to (1), comment on the company's relative liquidity at the beginning and end of the year. Explain the change in the company's liquidity from the beginning to the end of 2012.
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1111534912
8th edition
Authors: Gary A. Porter, Curtis L. Norton