Please Show all the steps involved in the calculations! Thank you! The current a
ID: 2408088 • Letter: P
Question
Please Show all the steps involved in the calculations! Thank you!
The current asset section of Guardian Consultant's balance sheet consists of cash, accounts recelvable, and prepald expenses. The 2018 balance sheet reported the following: cash, $1,440,000; prepald expenses, $500,000; noncurrent assets, $3,800,000; and shareholders' equity. $3,900,000. The current ratio at the end of the year was 20 and the debt to equity ratio was 1.4. Required Determine the following 2018 amounts and ratios: (Round your "The acld-test ratlo" answer to 1 declmal place.) 1. Current liabilities 2. Long-term liabilities 3. Accounts receivable 4. The acid-test ratioExplanation / Answer
1) Current Liabilities $ 27,80,000 2) Long-term liabilities $ 26,80,000 3) Accounts receivable $ 36,20,000 4) the Acid-test ratio 1.8 Working; a. Shareholders Equity = 39,00,000 Debt to equity ratio = Total Debt/ Equity = 1.4 Debt = 1.4 Equity = 1 Total Debt = 39,00,000 x 1.4 = 54,60,000 b. Total Debt 54,60,000 Shareholders Equity 39,00,000 Total Assets 93,60,000 c. Total Assets 93,60,000 Non Current Assets 38,00,000 Current Assets 55,60,000 d. Current Assets 55,60,000 Less: Cash 14,40,000 Prepaid Expense 5,00,000 19,40,000 Accounts receivable 36,20,000 e. Acid Test ratio = (Cash + Accounts receivable)/Current Liabilities = 50,60,000 / 27,80,000 = 1.8 Working: i. Cash 14,40,000 Accounts receivable 36,20,000 Total 50,60,000 ii. Current Liabilities = Current Assets / Current Ratio = 55,60,000 / 2.0 = 27,80,000 f. Total Liabilities 54,60,000 Current Liabilities 27,80,000 Long-term liabilities 26,80,000
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