Compute the current and quick ratios for each of the three

Assignment Help Accounting Basics

Reference no: EM13607370

1. Liquidity ratios. Edison, Stagg, and Thornton have the following financial information at the close of business on July 10: Edison Stagg Thornton Cash $4,000 $2,500 $1,000 Short-term investments 3,000 2,500 2,000 Accounts receivable 2,000 2,500 3,000 Inventory 1,000 2,500 4,000 Prepaid expenses 800 800 800 Accounts payable 200 200 200 Notes payable: short-term 3,100 3,100 3,100 Accrued payables 300 300 300 Long-term liabilities 3,800 3,800 3,800

a. Compute the current and quick ratios for each of the three companies. (Round calculations to two decimal places.) Which firm is the most liquid? Why?

b. Suppose Thornton is using FIFO for inventory valuation and Edison is using LIFO. Comment on the comparability of information between these two companies.

c. If all short-term notes payable are due on July 11 at 8 a.m., comment on each company's ability to settle its obligation in a timely manner.

Reference no: EM13607370

Questions Cloud

Assuming normality and equality of variances would you : a sample of 220 items turned out during a given week by a certain process had average weight of 2.46 pounds and

Two small plastic spheres are given positive electrical : two small plastic spheres are given positive electrical charges. when they are 20.0cm apart the repulsive force between

Equipment transaction and cash flow reporting dec 31 19x4 : equipment transaction and cash flow reporting dec. 31 19x4 dec. 31 19x3 land 94000 94000 equipment 652000 527000 less

Ac consulting company has purchased a new 18038 copier this : ac consulting company has purchased a new 18038 copier. this overhead cost will be shared by the purchasing accounting

Compute the current and quick ratios for each of the three : 1. liquidity ratios. edison stagg and thornton have the following financial information at the close of business on

A constantan strain gauge has a nominal 120 ohm electrical : a constantan strain gauge has a nominal 120 ohm electrical resistance in a unstressed and unstrained state. if the

If market research is performed for a new product what is : a company is considering producing some new gameboy electronic games. based on past records management believes that

Profitability ratios trading on the equity digital relay : profitability ratios trading on the equity. digital relay has both preferred and common stock outstanding. the

The company has fixed selling and administrative costs of : the company has fixed selling and administrative costs of 150000 per year. during the year peak produces 45000 snow

User Account

All Pages