Problem 9-3

Name:
Section:

Score: 100%

Key Code: 1
Instructions

Answers are entered in the cells with gray backgrounds.

Cells with non-gray backgrounds are protected and cannot be edited.
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.

1.
a. Working Capital = Current Assets - Current Liabilities
= $ 675,000 - 250,000

Working Capital = $ 425,000 Given data:

Call on the following amounts with yo
b. Current Assets formulas:
Current Ratio =
Current Liabilities
Cash
$ 675,000 Temporary investments
Current Ratio =
250,000 Accounts/notes receivable (net)
Inventories
Current Ratio = 2.7 Prepaid expenses
Accounts payable
Quick Assets Notes payable (short term)
c. Quick Ratio =
Current Liabilities Accrued expenses

$ 475,000
Quick Ratio =
250,000

Quick Ratio = 1.9

2.

Working Current Quick

Transaction Capital Ratio Ratio

a. $ 425,000 2.7 1.9

b. $ 425,000 3.0 2.1
c. $ 425,000 2.3 1.5
d. $ 425,000 2.9 2.0
e. $ 410,000 2.5 1.8
f. $ 425,000 2.7 1.9
g. $ 575,000 3.3 2.5
h. $ 425,000 2.7 1.9
i. $ 725,000 3.9 3.1
j. $ 425,000 2.7 1.9
Given data:
Call on the following amounts with your

$ 80,000
Temporary investments 160,000
Accounts/notes receivable (net) 235,000
Inventories 190,000
Prepaid expenses 10,000
Accounts payable 158,000
Notes payable (short term) 80,000
Accrued expenses 12,000

Supporting Calculations
Current Quick Current
Assets Assets Liabilities

$675,000 $475,000 $250,000

$635,000 435,000 210,000
$750,000 475,000 325,000
$645,000 445,000 220,000
$675,000 475,000 265,000
$675,000 475,000 250,000
$825,000 625,000 250,000
$675,000 475,000 250,000
$975,000 775,000 250,000
$675,000 465,000 250,000