GolfLink is a golf course company with clubs in ten provinces. Listed here is part of the comparative balance sheet at December 31, 2021, showing the following assets and liabilities, in alphabetical order:

Required

Part 1

a. Calculate total current assets at December 31, 2020, and December 31, 2021.

b. Calculate total current liabilities at December 31, 2020, and December 31, 2021.

Part 2

c. Calculate the current ratio for December 31, 2020 and December 31, 2021 (round to two decimal places).

d. Explain the meaning of GolfLink?s current ratio results calculated in part (c). Also indicate whether the change in the ratio was favourable or unfavourable.

Transcribed Image Text:

(thousands of dollars) 2021 2020 Accounts payable and accrued liabilities. Accounts receivable. Cash . Current borrowings. 20,706 17,755 .... 3,743 3,238 .... 1,567 1,447 25,817 24,839 Current portion of mortgage. 1,411 61 Customer deposits and prepaid dues. 10,965 6,037 Income taxes receivable . 1,322 176 Inventories and prepaid expenses. 5,848 5,289 Mortgage payable.. Property Plant & Equipment. 8,669 7,432 ....... 18,715 14,977 .....