Reference no: EM132935713
After creating the respective Balance Sheets, including calculating the missing values for certain items, the company with the higher acid test has an acid test ratio of______
Company A
Copyright: $50,000
Equipment: $100,000
Inventory: $50,000
A/R: $40,000
Cash: (?)
Owner's Equity: $25,000
Bank loan: $100,000
Mortgage: $75,000
A/P: $30,000
Current bills: $20,000
Company B
Cash: $50,000
Land : $250,000
Goodwill: $100,000
A/R: $50,000
Inventory: $50,000
Current bills: $15,000
Net Worth: $160,000
Loan: $300,000
A/P: (?)
Problem 1: The firm with the higher acid test has an acid test ratio of