ADM 1340 Lecture Notes - Contingent Liability, John Wiley & Sons, Maple Leaf Foods

• School: University of Ottawa
• Department: Administration
• Course: ADM 1340
• Professor: Suren Phansalker

Document Summary

Sales tax payable [,000 5% + (,000 + ) 8. 5%] Exercise 10-14 ($ in thousands) (a) current ratio. Based only on the current ratio, the fruition"s liquidity appears to be relatively stable and strong as there are enough current assets to pay the current liabilities. In order to make proper assessment, information concerning the due dates for the liabilities and the type of current assets that make up the remaining assets would need to be scrutinized. (1) (2) (b) current ratio for 2012: Kimmel, weygandt, kieso, trenholm, irvine financial accounting, fifth canadian edition 2012 (c) Paying off the ,000,000 improves fruition"s current ratio from 1. 4:1 to 1. 5:1. Having access to an operating line of credit means that cash is available on a short- term basis and therefore the assessment of the company"s short-term liquidity is better than it first appeared.