On January 1, 5G Co. reported current assets of $72,000 and current liabilities of $60,000. Compute total
Question:
On January 1, 5G Co. reported current assets of $72,000 and current liabilities of $60,000. Compute total current assets, total current liabilities, and the current ratio at January 1 and after each of the following transactions.
Jan. 5 Purchased equipment to be used in operations for $18,000 cash.
Jan. 12 Paid $5,000 cash for accounts payable.
Jan. 18 Acquired a building in exchange for a $99,000 long-term note payable, first payment to occur in 3 years.
Jan. 22 Purchased $12,000 of merchandise on credit, terms n/45.
Jan. 31 Sold outdated machinery for $12,700 cash.
Step by Step Answer:
Answer Computation of Total current assets total current liabilities and the Current ratio ...View the full answer
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
Students also viewed these Business questions
-
Equipment to be used in airplanes or spacecraft is often subjected to a shake test to be sure it can withstand the vibrations that may be encountered during flight. A radio receiver of mass 5.24 kg...
-
At December 31, 2019, Dwight AG reported current assets of 390,000 and current liabilities of 200,000. The following items may have been recorded incorrectly. Dwight uses the periodic method. 1....
-
Compute the weighted-average number of shares to be used in computing basic EPS for 2013. Because no beginning share figures are available, you must work backward from December 31, 2013, to compute...
-
Compose a detailed paper on the Emotions of employees and its impact on the organization
-
A piston/cylinder device keeping a constant pressure has 1 kg water at 20oC and 1 kg of water at 100oC both at 500 kPa separated by a thin membrane. The membrane is broken and the water comes to a...
-
Aaron Rivers, CPA, is auditing the financial statements of Charger Company, a client for the past five years. During past audits of Charger, Rivers identified some immaterial misstatements (most of...
-
A \(1.00-\mathrm{m}\) length of wire is shaped into a rectangle, and another \(1.00-\mathrm{m}\) length of identical wire is shaped into a circle. Both wires then move at the same speed into and then...
-
The following quality cost report came from the records of Vargas Company. Required a. Explain the strategy that Vargas Company initiated to control its quality costs. b. Indicate whether the...
-
Operating systems and application programs play vital role in our daily usage of computers. Differentiate between an operating system and an application program give examples each.
-
Let R = (A, B, C), and let r1 and r2 both be relations on schema R. Give an expression in the domain relational calculus that is equivalent to each of the following: a. IIA(r1) b. B =17 (r1) c. r1 ...
-
Niantic reported the following financial information (amounts in millions). Compute the current ratio and profit margin. Net sales.... Net income. Current assets......... $ 9,000 $4,400 Total...
-
Pritchett Co. reported the following year-end data: cash of $15,000; short-term investments of $5,000; accounts receivable (current) of $8,000; inventory of $20,000; prepaid (current) assets of...
-
A department store chain is about to order deluxe, standard, and discount headphones for next years inventory. The state of the nations economy (fate) during the year will be an important factor on...
-
Briefly describe YOUIs approach to service delivery. How does this approach assist the company in its market segmentation? Explain
-
A firm in a perfectly competitive industry is currently producing 4,000 units of output and the market equilibrium price for the good is $5.00. If the firm chooses to increase its output by one...
-
Are there marketing challenges globally ? What are the challenges? How can these challenges be overcome?
-
Imagine you are preparing to get a job. Describe how you would use each of the seven steps of personal selling to attain your goal? Prospecting Pre-approach Approach Making the presentation...
-
1. Rankine cycle operates between condenser pressure of 0.1 bar and boiler pressure of 70 bar. a) Suggest a suitable temperature at the turbine inlet and explain your suggestion. Consider a range...
-
Prove that the diagonal matrices form a subspace of Mnn. What is its dimension?
-
Complete problem P10-21 using ASPE. Data from P10-21 Original cost ................................................................. $7,000,000 Accumulated depreciation...
-
H20 Company is a merchandiser of three different products. The companys March 31 inventories are water skis, 40,000 units; tow ropes, 90,000 units; and life jackets, 250,000 units. Management...
-
During the last week of March, Siro Stereos owner approaches the bank for a $125,000 loan to be made on April 1 and repaid on June 30 with annual interest of 10%, for an interest cost of $3,125. The...
-
LaRocca Company sells its product for $20 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 40% of credit sales is collected in the month of the...
-
1. write the slope-intercept forms of the equations of the lines through the given point (a) parallel to the given line and (b) perpendicular to the given line. Point 69. (2, 1) 2. Line 4x-2y= 3...
-
What effects are required to develop and test a new product or service offering?
-
What steps would you take to attend an event such as an exhibition or tradeshow? How Would You Guarantee Media Coverage?
Study smarter with the SolutionInn App