Gamma Company and Delta Company have compiled the following data as of the end of the current
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Question:
Gamma Company and Delta Company have compiled the following data as of the end of the current fiscal year:
Gamma | Delta | |
Cash | $65,700 | $302,300 |
Temporary investments | 27,700 | 125,000 |
Accounts receivable | 2,500 | 87,000 |
Inventory | 52,400 | 127,500 |
Accounts payable | 4,500 | 265,000 |
Operating expenses | 153,000 | 625,000 |
Depreciation (one of the operating expenses) for Gamma was $35,000, and for Delta was $65,000.
1. Calculate days' cash on hand for Gamma Company and for Delta Company. Round your answer to one decimal place.
Gamma Company | days |
Delta Company | days |
2. Which company has the better liquidity position based on your calculation?
Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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