Home / Questions / Assume that the current ratio for Arch Company is 2 0 its acid-test ratio is 1 5 and its w...
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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. Answer each of the following questions independently, always referring to the original information. |
| Required: |
| a. | How much does the firm have in current liabilities? |
| 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? |
| c. |
If the firm collects an account receivable of $100,000, what will its new current ratio and working capital be? (Round ratio answer to 1 decimal place.) |
| d. |
If the firm pays an account payable of $100,000, what will its new current ratio and working capital be? (Round ratio answer to 1 decimal place.) |
| e. |
If the firm sells inventory that was purchased for $50,000 at a cash price of $60,000, what will its new acid-test ratio be? (Round your answer to 1 decimal place.) |
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