The comparative balance sheets of Monty Corporation at the beginning and end of the year 2020...

     

Transcribed Image Text:

The comparative balance sheets of Monty Corporation at the beginning and end of the year 2020 appear below. Assets Cash Accounts receivable Equipment MONTY CORPORATION BALANCE SHEETS Less: Accumulated Depreciation-Equipment Total Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total Dec. 31, 2020 $21,030 107,030 40,030 (17,000) $151,090 $21,030 101,030 29,030 $151,090 Jan. 1, 2020 $14,120 89,120 23,120 (11,000) $115,360 $16,120 81,120 18,120 $115,360 Inc./Dec. $6,910 Inc. 17,910 Inc. 16.910 Inc. 6,000 Inc. 4,910 Inc. 19,910 Inc. 10,910 Inc. Net income of $45,030 was reported, and dividends of $34,120 were paid in 2020. New equipment was purchased and none was sold. Compute the current ratio (current assets + current liabilities) as of January 1, 2020, and December 31, 2020. (Round ratios to 1 decimal place, e.g. 4.5.) Compute free cash flow for the year 2020. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).) The comparative balance sheets of Monty Corporation at the beginning and end of the year 2020 appear below. Assets Cash Accounts receivable Equipment MONTY CORPORATION BALANCE SHEETS Less: Accumulated Depreciation-Equipment Total Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total Dec. 31, 2020 $21,030 107,030 40,030 (17,000) $151,090 $21,030 101,030 29,030 $151,090 Jan. 1, 2020 $14,120 89,120 23,120 (11,000) $115,360 $16,120 81,120 18,120 $115,360 Inc./Dec. $6,910 Inc. 17,910 Inc. 16.910 Inc. 6,000 Inc. 4,910 Inc. 19,910 Inc. 10,910 Inc. Net income of $45,030 was reported, and dividends of $34,120 were paid in 2020. New equipment was purchased and none was sold. Compute the current ratio (current assets + current liabilities) as of January 1, 2020, and December 31, 2020. (Round ratios to 1 decimal place, e.g. 4.5.) Compute free cash flow for the year 2020. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer rating: 100% (QA)

To calculate the current ratio we use the formula Current Ratio Current Assets Current Liabilities w... View the full answer