Reference no: EM133180743

Question - a. Questions are based on the data taken from the balance sheet of Diamond Company at the end of the current year:

Accounts payable P145,000

Accounts receivable 110,000

Accrued liabilities 4,000

Cash 80,000

Income tax payable 10,000

Inventory 140,000

Marketable securities 250,000

Notes payable, short-term 85,000

Prepaid expenses 15,000

Required -

1. Determine the amount of working capital for the company?

2. Determine the company's acid-test ratio as of the balance sheet date?

b. Selected information from the accounting records of Petals Company is as follows:

Net sales for 2021 P900,000

Cost of goods sold for 2021 600,000

Inventory at December 31, 2020 180,000

Inventory at December 31, 2021 156,000

Required - Determine the Petals' inventory turnover for 2021?

c. Brava Company reported the following on its income statement:

Income before taxes P400,000

Income tax expense P120,000

Net income P280,000

An analysis of the income statement revealed that interest expense was P100,000.

Required - Determine the Brava Company's times interest earned (TIE)?