Financial statement data of Groatland Engineering include the following items: Cash $26,000 Accounts payable $107,000 Short-term investments
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Question:
Financial statement data of Groatland Engineering include the following items:
Cash $26,000
Accounts payable $107,000
Short-term investments 36,000
Accrued liabilities 32,000
Accounts receivable, net 85,000
Long-term notes payable 163,000
Inventories 147,000
Other long-term liabilities 34,000
Prepaid expenses 6,000
Net income 99,000
Total assets 677,000
Short-term notes payable 49,000
Number of common shares outstanding 46,000
REQUIREMENTS:
1. | Calculate Greatland's current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places. | |
2. | Calculate the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately. | |
a. | Borrowed $105,000 on a long-term note payable | |
b. | On January 1, Issued 40,000 shares of common stock, receiving cash of $360,000 | |
c. | Paid off short-term notes payable, $28,000 | |
d. | Purchased $43,000 of merchandise on account, debiting Inventory | |
e. | Received cash on account, $17,000 | |
Expert Answer:
Solution Current Ratio Current Ratio Current AssetsCurrent liabilities Here Current Assets Cash Short term investment Accounts receivable Inventories ... View the full answer
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