Question - Shirley Company has the following partial list of account balances at year end:
Accounts payable-------------------------------------$500
Accounts receivable---------------------------------- 1,600
Bonds payable (due in 5 years) ------------------- 80,000
Cash------------------------------------------------------ 2,000
Equipment (net) -------------------------------------- 5,000
Land------------------------------------------------------ 9,900
Notes payable (due in 6 months) ----------------- 800
Salaries payable -------------------------------------- 700
Cost of Goods Sold ----------------------------------- 5,000
Required:
A. Compute the current ratio
B. Determine the amount of working capital
C. Compute the payable turnover
D. Assume that cash is used to pay the balance due on accounts payable.
1. Compute the new current ratio.
2. Compute the new amount of working capital.