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Assume that the current ratio for Arch Company is 3.5, its acid-test ratio is 1.5, and its working capital is $370,000. Answer each of the following questions independently, always referring to the original information.

a. How much does the firm have in current liabilities? (Do not round intermediate calculations.)

b. If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory? (Do not round intermediate calculations.)

c. If the firm collects an account receivable of $114,000, what will its new current ratio and working capital be? (Round "Current ratio" to 1 decimal place.)

d. If the firm pays an account payable of $54,000, what will its new current ratio and working capital be? (Do not round intermediate calculations. Round "Current ratio" to 1 decimal place.)

e. If the firm sells inventory that was purchased for $50,000 at a cash price of $57,000, what will its new acid-test ratio be? (Do not round intermediate calculations. Round your answer to 1 decimal place.)

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Collen Von
Collen VonLv2
28 Sep 2019

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Assume that the current ratio for Arch Company is 3.5, its acid-test ratio is 2.0, and its working capital is $330,000. Answer each of the following questions independently, always referring to the original information. Required: a. How much does the firm have in current liabilities? . If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory? (Do not round intermediate calculations.) If the firm collects an account receivable of $106,000, what will its new current ratio and working capital be? ( d. If the firm pays an account payable of $60,000, what will its new current ratio and working capital be? d. If the firm pays an account payable of $60,000, what will its new current ratio and working capital be?

Assume that the current ratio for Arch Company is 2.0, its acid-test ratio is 1.5, and its working capital is $ 300,000. Answereach of the following questions independently, always referring tothe original information.

a. How much does the firm have in current liabilities?
b. If the only current assets shown on the balance sheet for ArchCompany are Cash, Accounts Receivable, and Merchandise Inventory,how much does the firm have in Merchandise Inventory?
c. If the firm collects an account receivable of $ 100,000, whatwill its new current ratio and working capital be?
d. If the firm pays an account payable of $ 100,000, what will itsnew current ratio and working capital be?
e. If the firm sells inventory that was purchased for $ 50,000 at acash price of $ 60,000, what will its new acid- test ratio be?

Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 185 $ 260 Accounts receivable, net 290 310 Inventory 260 230 Prepaid expenses 20 20 Total current assets 755 820 Plant and equipment, net 970 1,020 Total assets $ 1,725 $ 1,840 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 230 $ 260 Accrued liabilities 50 50 Notes payable, short term 40 40 Total current liabilities 320 350 Bonds payable 220 330 Total liabilities 540 680 Stockholders’ equity: Common stock, $2 par value 200 200 Additional paid-in capital 330 330 Retained earnings 655 630 Total stockholders’ equity 1,185 1,160 Total liabilities & stockholders’ equity $ 1,725 $ 1,840 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) $ 1,330 Cost of goods sold 830 Gross margin 500 Selling and administrative expense 405 Net operating income 95 Interest expense 20 Net income before taxes 75 Income taxes (30%) 23 Net income $ 52 Dividends on common stock during Year 2 totaled $27 thousand. The market price of common stock at the end of Year 2 was $16.30 per share. Required: Compute the following for Year 2: a. Gross margin percentage. (Round your answer to 1 decimal place.) b. Earnings per share. (Round your answer to 2 decimal places.) c. Price-earnings ratio. (Do not round intermediate calculations. Round your answer to 1 decimal place.) d. Dividend payout ratio. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place.) e. Dividend yield ratio. (Round your "Percentage" answer to 2 decimal places.) f. Return on total assets. (Do not round intermediate calculations. Round your "Percentage" answer to 2 decimal places.) g. Return on equity. (Round your "Percentage" answer to 2 decimal places.) h. Book value per share. (Round your answer to 2 decimal places.) i. Working capital. (Input your answer in thousands of dollars.) j. Current ratio. (Round your answer to 2 decimal places.) k. Acid-test (quick) ratio. (Round your answer to 2 decimal places.) l. Accounts receivable turnover. (Round your answer to 2 decimal places.) m. Average collection period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) n. Inventory turnover. (Round your answer to 2 decimal places.) o. Average sale period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) p. Times interest earned ratio. (Round your answer to 2 decimal places.) q. Debt-to-equity ratio. (Round your answer to 2 decimal places.)

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