9) The following financial information is for Alpha Corporation are for the fisc
ID: 2569473 • Letter: 9
Question
9) The following financial information is for Alpha Corporation are for the fiscal years ending 2017 & 2016 (all balances are normal): Item/Account 2017 2016 Cash $26,000 $16,000 Accounts Receivable 40,000 50,000 Inventory 30,000 22,000 Current Liabilities 76,000 42,000 Net Sales (all credit) 390,000 360,000 Cost of Goods Sold 260,000 250,000 Use this information to determine for FY 2017: (Round & enter your answers to one decimal place for non-dollar ratios and enter the value. For dollar ratio enter as whole dollars only.) 1. the Current Ratio 2. Working Capital
Explanation / Answer
1. the Current Ratio for 2017 = Current Assets / Current Liabilities
= ( Cash + Accounts Receivable + Inventory ) / Current Liabilities
= ( $ 26,000 + $ 40,000 + $ 30,000) / $ 76,000
= $ 96,000 / $ 76,000
= 1.3
Hence the correct answer is 1.3
2. Working Capital = Current Assets - Current Liabilities
= $ 96,000 - $ 76,000
= $ 20,000
Hence the correct answer is $ 20,000
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