Solution-Calculate the acid test ratio

Calculate the acid test ratio

Assignment Help Accounting Basics

Reference no: EM132080722

Question - Dunder Mifflin had the following balances in selected accounts at the end of 2015 and 2016.

	2015	2016
Cash	$58,000	$45,000
Short-term investments	46,000	39,000
Accounts receivable	54,000	61,000
Allowance for uncollectible accounts	3,500	5,000
Inventory	78,000	98,000
Accounts payable	91,000	102,000
Wages payable	17,000	25,000
Income tax payable	4,500	6,500
Note payable (due 2022)	100,000	100,000
Sales	415,000	525,000
Cost of goods sold	225,000	304,000

The accounts receivable at the end of 2014 were $50,000 and the allowance for uncollectible accounts was $2,500.

Required:

1. Calculate the acid test ratio for 2015 and 2016 for Dunder Mifflin.

2. Calculate the days sales in receivables for 2015 and 2016 for Dunder Mifflin.

3. Determine whether the acid-test ratio improved or deteriorated from 2015 to 2016.

4. Determine whether the collection period increased or decreased from 2015 to 2016.

Reference no: EM132080722

Questions Cloud

Direct and indirect discrimination in a same organisation : Provide an example scenario of direct and indirect discrimination in a same organisation. You can use any one workplace or imaginary

Review problem on emerging operations : A major hurricane has struck the area where your company has its central data center. There are offsite backups and hardware at three others centers around.

Relation to whs positive performance indicators : Can put me in the right direction in relation to WHS positive performance indicators objectives do you have any PPI tables you can share as examples?

Determine which has a higher roi : Commit to buy a vacation home in the climate of your choice, rent the home out when you are not using it, or sign a five-year lease.

Calculate the acid test ratio : The accounts receivable at the end of 2014 were $50,000 and the allowance for uncollectible accounts was $2,500. Calculate the acid test ratio

Define how does web change security for the internet : Much has been made of the new Web 2.0 phenomenon, including social networking sites and user-created mash-ups. How does Web 2.0 change security.

How can you be innovative in mature industry : How much of an impact does the "maturity" level of the industry or company have on strategy? How can you be innovative in a mature industry?

Determine the communication problems with the email : Include: content, completeness, correctness, clarity, coherence, conciseness, connection, creativity, courtesy, and closure.

Enough safeguards to minimize this incident from occurring : Was this an unpreventable incident, or did Citibank fail to implement enough safeguards to minimize this incident from occurring?

User Account

All Pages

Calculate the acid test ratio

Reference no: EM132080722

Reference no: EM132080722

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT