Question: Profitability Ratios Bryce Company manufactures pet supplies. However, Bryce's electronic accounting system recently crashed and, unfortunately, only a partial recovery of the company's year-end accounting records (which included several profitability ratios) was possible. As a result, Bryce's controller, a bright young CPA named Jeanette, must compute various lost financial account balances using the recovered information listed below:
• Long-term liabilities: $1,500,000
• Ending inventory is the same as beginning inventory
• Gross margin: $3,000,000
• Net sales: $8,000,000
• Accounts receivable turnover: 50
• Ending accounts receivable is the same as beginning accounts receivable
• Total liabilities: $2,000,000
• Current ratio: 2.5
• Cash: $600,000
• Quick ratio: 2.0
• Inventory turnover in days: 3.65 OBJECTIVE
• 3 OBJECTIVE
• 3 OBJECTIVE
• 3 OBJECTIVE
• 5
Required: 1. Calculate current liabilities.
2. Calculate current assets.
3. Calculate average accounts receivable
4. Calculate marketable securities.
5. Calculate average inventory.