Help with working capital and current ratio! Evans, Inc., had current liabilitie

Question

Help with working capital and current ratio!

Evans, Inc., had current liabilities at April 30 of $120,500. The firm's current ratio at that date was 1.8. Required: (a) Calculate the firm's current assets and working capital at April 30. Current assets 216,900 Working capital S96,400 (b) Assume that management paid $30,125 of accounts payable on April 29. Calculate the current ratio and ansue ta tiwa dtcimil olaces he pmi 29 payment had not been made. (Round your curent ratio answer to two decimal places.) Current ratio Working capital

Explanation / Answer

a.

current ration is 1.8

current ratio= current asset/current liability

1.8 = current asset/120500

current asset = 120500*1.8

= $216900

Working capital= current assets-current liability

= 216900-120500 = $96400

b.

not paid 30125

new current assset = 216900+30125= $247025

new current liability = 120500+30125= $150625

working capital = 247025-150625 = 96400

current ratio = 247025/150625 = 1.64

c.

NO change in woking capital

current ratio decresed by .16 due to payment on 29th april

= 2.07

c.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.