Canadian Bacon Inc. financial statements are presented in the table below

jagguarpaw January 16, 2017 0 Comments

Question: Canadian Bacon Inc. financial statements are presented…

 

Canadian Bacon Inc. financial statements are presented in the table below.

Based on the information in the table, calculate the firm’s acid-test ratio (quick ratio).

Round the answers to two decimal places

Balance Sheet December 31, 2010

Cash and marketable securities $102,000 Accounts payable $287,000
Accounts receivable $299,000 Notes payable $61,200
Inventories $628,000 Accrued expenses $51,900
Prepaid expenses $10,300 Total current liabilities $400,100
Total current assets $1,039,300 Long-term debt $415,000
Gross fixed assets $1,502,000 Par value and paid-in-capital $376,000
Less: accumulated depreciation $312,000 Retained Earnings $1,038,200
Net fixed assets $1,190,000 Common Equity 1,414,200
Total assets $2,229,300 Total liabilities and owner’s equity $2,229,300

Income statement, Year of 2010

Net sales (all credit) $6,387,700.00
Less: Cost of goods sold $4,726,898.00
Selling and administrative expenses $345,000.00
Depreciation expense $148,000.00
EBIT $1,167,802.00
Interest expense $50,600.00
Earnings before taxes $1,117,202.00
Income taxes $446,880.80
Net income $670,321.20