Asked on 29 Oct 2017

EXERCISE 15-12 Selected Financial Measures for Assessing Liquidity (L015-2] Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 2.5 on June 30 of the current year. On that date, the company's assets were: Cash ......... ..... Accounts receivable, net ........... Inventory .. Prepaid expenses..................... Plant and equipment, net .............. Total assets $ 90,000 260,000 490,000 10,000 800,000 $1,650,000 Required: 1. What was the company's working capital on June 302 2. What was the company's acid-test ratio on June 302 3. The company paid an account payable of $40,000 immediately after June 30. a. What effect did this transaction have on working capital? Show computations b. What effect did this transaction have on the current ratio? Show computations

Answered on 29 Oct 2017

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