Calculate working capital and the current ratio at year-end

Reference no: EM13599818

Management of Rivers Co. anticipates that its year-end balance sheet will show current assets of $12,828 and current liabilities of $7,500. Management is considering paying $3,770 of accounts payable before year-end even though payment isn't due until later.

Calculate the firm's working capital and current ratio under each situation.

Do Not Prepay Prepay
Accounts Payable Accounts Payable
Working capital $ $
Current ratio

a. Assume that Rivers Co. had negotiated a short-term bank loan of $7,000 that can be drawn down either before or after the end of the year. Calculate working capital and the current ratio at year-end under each situation, assuming that early payment of accounts payable is not made.

Without Loan With Loan
Working capital $ $

Reference no: EM13599818

Questions Cloud

Describe what manufacturing information would be important : assume that you manage the manufacturing operations for the custom order division of a company that makes fine jewelry.

Following are the current asset and current liability : following are the current asset and current liability sections of the balance sheets for freedom inc. at january 31

Use the following information to calculate ending inventory : use the following information to calculate ending inventory on a a lifo basis b a fifo basis and c an average-cost

Discuss the advantages and disadvantages of using machine : hurst mats manufactures custom replacement floor mats for automobiles. the floor mats are made of spun nylon on highly

Calculate working capital and the current ratio at year-end : management of rivers co. anticipates that its year-end balance sheet will show current assets of 12828 and current

The production manager of rordan corporation has submitted : the production manager of rordan corporation has submitted the following forecast of units to be produced by quarter

Swift corp a capital goods manufacturing business that : swift corp a capital goods manufacturing business that started on jan 4 2012 and operates on a calendar year basis

How should you evaluate macgivers annual report in light of : macgiver brass is a brass plating firm with sales of 8 million and profits before taxes of 625000. macgiver has a loan

Harrington precision parts repaired one of its boeing 737 : harrington precision parts repaired one of its boeing 737 aircrafts at a cost of 150000. harrington precision parts

User Account

All Pages