Group Project 3 - Team Drive X Exam Chapters 3 https://mybusinesscourse.com/plat
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Group Project 3 - Team Drive X Exam Chapters 3 https://mybusinesscourse.com/platform/mod/quiz/attempt.php?attempt-17590468&page-10; ? ? Busi E Menu O Adrianna Razo ACC122:DL 01 and 02- Principles of Accounting HYDRO COMPANY Balance Sheet December 31, 2015 Cash Accounts receivable (ne 0,000 0% Bonds payable Inventory Plant and equipment (net) 250,0 Retained earnings $40,000 Current liabilities $80,000 120,000 200,000 100,0D0 12 13 14 15 Ch 1: Overview of Managerial Accounting 16 17 18 130,000 Common Stock Ch 2: Managerial Accounting Concepts and Cost Flows Finish attempt... Total assets Total Liabilities and Stockholders Equity Time left 2:15:47 Ch 3: Cost Accounting Sales revenues for 2015 were $800,000, gross profit was $320,000, and net income was $36,000. The income tax rate was 40 percent. One year ago, accounts recelvable (net) were $76,000, inventory was $110,000, total assets were $460,000, and stockholders' equity was $260,000. The bonds payable were outstanding all year and the 2015 interest expense was $12,000 The current ratio of Hydro Company at 12/31/2015, calculated using the above data, was 3.13 and the company's working capital was $170,000. Which of the following would happen if the firm paid off $20,000 of its current liabilities on January 1, 2016? Systems: Job Order Costing Ch 4: Cost Accounting Systems: Process Costing Ch 5:Activity-Based Select one: O Both the current ratio and working capital would increase. O Both the current ratio and working capital would decrease. O The current ratio would increase, but working capital would remain the same. O The current ratio would increase, but working capital would decrease. Costing Ch 6:Cost-Volume- Profit Relationships Ch 7: Variable Costing A Tool for Decision Making Ch 8: Relevant Costs and Short-Term Decision Making Previous page Next pageExplanation / Answer
Current asset afer payoff : (40000-20000paid)cash+80000receivable+130000 inventory =230000
current liability = 80000-20000=60000
current ratio =current asset /current liabilities
= 230000 /60000
= 3.83 (increase from 3.13 )
working capital = 230000-60000= 170000 (same)
correct option "C"
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