The following schedule lists the current assets and current liabilities of Iago Department Stores for the ï¬rms
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(a) Determine Iagos working capital and current ratio at year-end of Year 1 and Year 2.
(b) Did Iagos liquidity improve or weaken between the end of Year 1 and the end of Year 2? Explain.
Transcribed Image Text:
December 1 Cash Cash equivalent Accounts receivable Merchandise inventory Year 1 210 64 3,876 120 $4,270 Year 2 $ 34 278 4,162 190 $4,664 Total Current Assets Short-term debt Current maturities of 156 long-term debt Accounts Accrued expenses Income tax payable 510 1,046 1,820 238 $3,770 170 1,930 1,542 186 $3,828 payable Total Current Liabilities
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a Year 1 Working capital 4270 3770 500 Current ratio 4270 37...View the full answer
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