Question

1)Tasia Corp. has current liabilities of $411,000, a quick ratio of 1.20, inventory turnover of 3.70, and a current ratio of 3.90. What is the cost of goods sold for the company?

2)Aesop invests $103 in an account that pays 6 percent simple interest. How much money will Aesop have at the end of 4 years?

Answer 1

1) Current assets = Current liabilities * Current ratio = $411,000 * 3.90 = $1,602,900

Quick ratio = (Current assets - Inventory) / Current liabilities

1.20 = ($1,602,900 - Inventory) / $411,000

1.20 * $411,000 = $1,602,900 - Inventory

$493,200 = $1,602,900 - Inventory

Inventory = $1,602,900 - $493,200

Inventory = $1,109,700

Cost of goods sold = Inventory turnover * Inventory

Cost of goods sold = 3.70 * $1,109,700

Cost of goods sold = $4,105,890

2) Interest = Principal * Rate * Time = $103 * 0.06 * 4 = $24.72

Amount = $103 + $24.72

Amount = $127.72