Use the Allstott, Inc., balance sheet data below.

1. Compute Allstott, Inc.'s quick (acid-test) ratio at December 31, 2020 and 2019.

2. Use the comparative information from the table on page 597 for Baker, Inc., Calvin Company, and Dunn Companies Limited. Is Allstott's quick (acid-test) ratio for 2020 and 2019 strong, average, or weak in comparison?

Transcribed Image Text:

Dollarama Inc. Notes to Consolidated Financial Statements January 28, 2018 and January 29, 2017 (Expressed in thousands of Canadian dollars, unless otherwise noted) 3 Summary of significant accounting policies (cont'd) Property, plant and equipment Property, plant and equipment are carried at cost and depreciated on a straight-line basis over the estimated useful lives of the assets as follows: Store and warehouse equipment Vehicles Building and roof Leasehold improvements Computer equipment 10 to 15 years 5 years 20-50 years Lease term 5 years The Corporation recognizes in the carrying amount of property, plant and equipment the full purchase price of assets acquired or constructed as well as the costs incurred that are directly incremental as a result of the construction of a specific asset, when they relate to bringing the asset into working condition. Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized. The rate for calculating the capitalized financing cost is based on the Corporation's weighted average cost of borrowing experienced during the reporting period. The Corporation also capitalizes the cost of replacing parts of an item when that cost is incurred, if it is probable that the future economic benefits embodied within the item will flow to the Corporation and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized.