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Compute the following ratios at december 31 2015 acid-test

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Reference no: EM13567829

Frizell Company has the following comparative balance sheet data.

FRIZELL COMPANY Balance Sheets December 31

 

 

2015

2014

Cash

$ 15,000

$ 30,000

Accounts receivable (net)

70,000

60,000

Inventory

60,000

50,000

Plant assets (net)

200,000

180,000

 

$345,000

$320,000

Accounts payable

$ 50,000

$ 60,000

Mortgage payable (6%)

100,000

100,000

Common stock, $10 par

140,000

120,000

Retained earnings

55,000

40,000

 

$345,000

$320,000

Additional information for 2015:

  1. Net income was $25,000.
  2. Sales on account were $410,000. Sales returns and allowances were $20,000.
  3. Cost of goods sold was $198,000.

Instructions

Compute the following ratios at December 31, 2015.

(a) Current ratio.

(b) Acid-test ratio.

(c) Accounts receivable turnover.

(d) Inventory turnover.

Reference no: EM13567829

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