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The following financial information was taken from a firm’s accounting records on December 31, 2017. Use...

The following financial information was taken from a firm’s accounting records on December 31, 2017. Use this information to determine the items below. Cash $ 44,000 Accounts Receivable (Net) 171,840 Merchandise Inventory 506,160 Property, Plant, and Equipment (Net) 480,000 Accounts Payable 152,000 Bonds Payable, 2025 180,000 What is working capital? What is current ratio? What is acid test ratio?

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Answer #1
Assets Amt
Cash 44,000
Inventory 506,160
Accounts Receivable 171,840
Total Current Assets (A) 722,000
Current Liabilities
Accounts Payable (B) 152,000
Current Ratio (A/B) 4.75
Assets Amt
Cash 44,000
Inventory 506,160
Accounts Receivable 171,840
Total Current Assets (A) 722,000
Current Liabilities
Accounts Payable (B) 152,000
Working Capital (A-B) 570,000
Assets Amt
Cash 44,000
Accounts Receivable 171,840
Total Current Assets (A) 215,840
Current Liabilities
Accounts Payable (B) 152,000
Acid Test Ratio (A/B) 1.42
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