Determine the current ratio and working capital

Assignment Help Accounting Basics

Reference no: EM131983416

Problem

The Statement of Financial Position of Indaba Company includes the following items:

Cash R 23 000
Accounts receivable R13 000

Inventory R45 000
Prepaid insurance R800

Land R80 000
Accounts payable R54 900

Salaries payable R1 200
Share capital R100 000

Accumulated profit (retained earnings) R5 700

a) Determine the current ratio and working capital.

b) Beyond the information provided in your answer in a) above, what does the composition of the current assets tell you about Indaba Company's liquidity?

c) What other information do you need to assess Indaba's liquidity fully?

Reference no: EM131983416

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