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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 58
Analyzing the, Impact of Selected Transactions on the Current Ratio
The Sports Authority, Inc. , is a private full-line sporting goods retailer. Assume one of the Sports Authority stores reported current assets of $88,000 and its current ratio was 1.75, and then completed the following transactions: (1) paid $6,000 on accounts payable, (2) purchased a delivery truck for $10,000 cash, (3) wrote off a bad account receivable for $2,000, and (4) paid previously declared dividends in the amount of$25,000.
Required:
Compute the updated current ratio, rounded to two decimal places, after each transaction.
The Sports Authority, Inc. , is a private full-line sporting goods retailer. Assume one of the Sports Authority stores reported current assets of $88,000 and its current ratio was 1.75, and then completed the following transactions: (1) paid $6,000 on accounts payable, (2) purchased a delivery truck for $10,000 cash, (3) wrote off a bad account receivable for $2,000, and (4) paid previously declared dividends in the amount of$25,000.
Required:
Compute the updated current ratio, rounded to two decimal places, after each transaction.
Explanation
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Current ratio:
Current ratio shows the ...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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