Reference no: EM132048179

Problem - Use the following income statement and balance sheet to answer the following questions.

Income Statement

Sales 130,000

Cost of Goods Sold 26,000

Profit Margin 104,000

Salaries and Wages 15,000

Rent Expense 5,000

Licensing Expenses 20,000

Advertising Expense 4,000

Total Expenses 44,000

Net Income 60,000

Balance Sheet

Assets

Cash 10,000

Inventory 15,000

Property, Plant, and Equipment 250,000

Accounts Receivable 5,000

Total Assets 280,000

Liabilities

Accounts Payable 20,000

Notes Payable 40,000

Total Liabilities 60,000

Owners' Equity

Common Stock 120,000

Retained Earnings 100,000

Total Owners' Equity 220,000

Calculate the company's current ratio and quick ratio.