Freiman Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year...

 

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Freiman Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Current assets: Cashi Assets Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Bonds payable Total liabilities Stockholders' equity: Common stock, $2 par value Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities & stockholders' equity Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30 %) Net income. $1,550 900 650 389 261 47 214 64 $ 150 Year 2 $ 172 250 132 46 600 760 $ 1,360 $ 142 96 66 304 298 602 112 230 416 758 $ 1,360 Year 1 $ 132 270 142 46 590 760 $ 1,350 $ 162 96 76 334 308 642 112 230 366 708 $ 1,350 Calculate Acid-Test ratio Freiman Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Current assets: Cashi Assets Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Bonds payable Total liabilities Stockholders' equity: Common stock, $2 par value Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities & stockholders' equity Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30 %) Net income. $1,550 900 650 389 261 47 214 64 $ 150 Year 2 $ 172 250 132 46 600 760 $ 1,360 $ 142 96 66 304 298 602 112 230 416 758 $ 1,360 Year 1 $ 132 270 142 46 590 760 $ 1,350 $ 162 96 76 334 308 642 112 230 366 708 $ 1,350 Calculate Acid-Test ratio

Answer rating: 100% (QA)

The AcidTest ratio also known as the Quick ratio AcidTest R... View the full answer