Computation of Current ratio, Working capital, Acid-test ratio, Receivables turnover and Inventory turnover.
Boyle Corporation had the following comparative current assets and current liabilities:
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|
Dec. 31, 2002
|
Dec. 31, 2001
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|
Current assets
|
|
|
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Cash
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$60,000
|
$30,000
|
|
Marketable securities
|
40,000
|
10,000
|
|
Accounts receivable
|
55,000
|
95,000
|
|
Inventory
|
110,000
|
90,000
|
|
Prepaid expenses
|
35,000
|
20,000
|
|
|
|
|
|
Total current assets
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$300,000
|
$245,000
|
|
Current liabilities
|
|
|
|
Accounts payable
|
$140,000
|
$110,000
|
|
Salaries payable
|
40,000
|
30,000
|
|
Income tax payable
|
20,000
|
15,000
|
|
|
|
|
|
Total current liabilities
|
$200,000
|
$155,000
|
During 2002, credit sales and cost of goods sold were $750,000 and $400,000, respectively.
INSTRUCTIONS
Compute the following liquidity measures for 2002:
1. Current ratio.
2. Working capital.
3. Acid-test ratio.
4. Receivables turnover.
5. Inventory turnover.