Based on the information in Table 4-2, the acid-test ratio is Table 4-2 Drummond Company Balance...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Based on the information in Table 4-2, the acid-test ratio is Table 4-2 Drummond Company Balance Sheet Assets: Cash and marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Fixed assets Less: accum. depr. Net fixed assets Total assets Liabilities: Accounts payable Notes payable Accrued taxes Total current liabilities — Long-term debt Common Stock (100,000 shares) Retained Earnings Total liabilities and owner's equity Net sales (all credit) Less: Cost of goods sold Selling and administrative expense Depreciation expense Interest expense Earnings before taxes Income taxes Net income 2,800,000 (1,087,500) $400,000 1,415,000 1,847,500 24,000 3,686,500 1,712,500 $5,399,000 $600,000 875,000 92,000 $1,567,000 900,000 700,000 2,232,000 $5,399,000 $6,375,000 (4,375,000) (1,000,000) (135,000) (100,000) $765,000 (306,000) $459,000 Based on the information in Table 4-2, the acid-test ratio is Table 4-2 Drummond Company Balance Sheet Assets: Cash and marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Fixed assets Less: accum. depr. Net fixed assets Total assets Liabilities: Accounts payable Notes payable Accrued taxes Total current liabilities — Long-term debt Common Stock (100,000 shares) Retained Earnings Total liabilities and owner's equity Net sales (all credit) Less: Cost of goods sold Selling and administrative expense Depreciation expense Interest expense Earnings before taxes Income taxes Net income 2,800,000 (1,087,500) $400,000 1,415,000 1,847,500 24,000 3,686,500 1,712,500 $5,399,000 $600,000 875,000 92,000 $1,567,000 900,000 700,000 2,232,000 $5,399,000 $6,375,000 (4,375,000) (1,000,000) (135,000) (100,000) $765,000 (306,000) $459,000
Expert Answer:
Answer rating: 100% (QA)
The acidtest ratio also known as the quick ratio is a measure of a companys ability t... View the full answer
Related Book For
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher
Posted Date:
Students also viewed these finance questions
-
1.Goodyear implemented the DRII/NFPA 1600 approach. What strategies can be utilized to make sure recovery starts quickly, perhaps even while the incident is ongoing? 2.Please explain how the five...
-
How can leaders promote integrity through inclusive and equitable practices, addressing systemic biases, discrimination, and social injustices to create a more inclusive and socially responsible...
-
2) (1,-4) Graph of f' Let f b a twice-differentiable function defined on the interval -1.2 < x < 3.2 with f(1) = 2. The graph of f'(x), the derivative of f, is shown above. The graph of f' crosses...
-
Another equation that has been used to model population growth is the Gompertz equation: dy dt ky In(K/y) , where k and K are positive constants. For each y in 0 < y K, show that dy/ dt is never less...
-
In what account is the difference between book value and the value implied by the purchase price recorded on the books of the investor? In what account is the "excess of implied over fair value"...
-
Proof that If |K| = p n , then every element of K has a unique pth root in K
-
What are the different sources of paid-in capital?
-
Super Bookstore (SB) is a large city bookstore that sells books and music CDs and has a caf. SB operates at capacity and allocates selling, general, and administration (S, G & A) costs to each...
-
1) Traditional approaches to the relationships between exchange rates and the balance of payments A) focus on fixed exchange rate regimes. B) focus on flexible exchange rate systems. C) focus on the...
-
A typical balance sheet will show $ in accounts receivables and $ held in accounts payables. One is considered an asset. The other is listed as a liability on the balance sheet. The dollars tied up...
-
Corporation X is considering remodeling a building that it leases to a retail store. The remodeling costs are estimated at $2.15 million. If it goes ahead with the project, the tenant has agreed to...
-
Explain what is meant by an uptrend, downtrend and sideways trend.
-
When you purchased your house , you took out a 30 - year mortgage with an interest rate of 4.8 % per year . The monthly payment on the mortgage $ 3,431 . You have just made a payment and have now...
-
The benefits to financial statement users when accountants separate the debt and equity features of hybrid debt securities. Additionally, Why might this be necessary? Explain? What might impact the...
-
What do you think the advantages and disadvantages of a business plan are? Name and describe 5 public resources you could use to find business plan resources (you can use your book)? What Business(s)...
-
I need the py file and output file. Run all menu options and show input validation. Thank you. AutoSave Off File Home Insert Read Print Web Mode Layout Layout Views Page 1 of 3 1003 words Design...
-
Explain how the graph of each function can be obtained from the graph of y = 1/x or y = 1/x 2 . Then graph f and give the (a) Domain (b) Range. Determine the largest open intervals of the domain over...
-
From the HeadlinesChipotle: Describe how cash budgets and projected financial statements could be used in estimating how far $360 million could take Chipotle after its first 14 restaurants.
-
What are the restrictions on general solicitation and advertising covered in Rule 504?
-
What asset and financial bubbles have occurred recently? How can bubbles and financial crises lead to entrepreneurial opportunities?
-
The constants obtained by Shende and Sharma (1974) for use in Eq. (16-72) are given in the following table. Assume their experiments with \(\mathrm{NaOH}-\mathrm{SO}_{2}\) were done at \(1.0...
-
We are separating methanol and water in a staged distillation column at total reflux to determine Murphree efficiency. Pressure is \(101.3 \mathrm{kPa}\). The column has a 2.0 -in. head of liquid on...
-
The large-scale column in Example 16-4 is fed a saturated liquid with mole fraction \(\mathrm{z}=0.5\), and separation is essentially complete ( \(\mathrm{x}_{\text {dist }} \sim 1.0\) and...
Study smarter with the SolutionInn App