What is formula for calculating current ratio and acid test

Assignment Help Financial Accounting

Reference no: EM13133604

what is the formula for calculating current ratio and acid test ratio after a transaction. For example, a Company has $1,000,000 of current assets, a current ratio of 1.8:1 and an acid test ratio of 1.4:1. First transaction is purchased $80,000 of merchandise inventory on credit. What is the new current ratio and acid test ratio and how do you get it.

Reference no: EM13133604

Questions Cloud

Which one is another name for the static budget : How does a graph of a flexible budget compare to a CVP graph?

What must brock report as income from property distribution : Posey Corporation distributes land with a Fair Market Value of $20,000 and a basis of $12,000 to Brock, a shareholder. Posey's earnings and profits are $125,000. What must Brock report as income from the property distribution?

Outline why the culture of a country influences the costs : What can we learn about International Business from this thing and outline why the culture of a country influences the costs of doing business in that country. Illustrate your answer with examples.

Equation of the circle : Find the equation of the circle with center at the intersection of 4x + y - 4 = 0 and x - y - 6 = 0 and passing through (-1, -3). What is the equation of the circle passing through (12, 1) & (2, -3) and having its center on the line 2x - 5y + 10 = 0..

What is formula for calculating current ratio and acid test : what is the formula for calculating current ratio and acid test ratio after a transaction. For example, a Company has $1,000,000 of current assets.

Determine the initial pressure of carbon tetrachloride : The equilibrium constant Kp for the reaction ; CCl4(g) C(s) + 2Cl2(g) at 700 celcius is 0.76 atm. Determine the initial pressure of carbon tetrachloride

Banking of circular track : The sleepers of a railway track which is turning round a bend of radius 60m are banked so that a train traveling at 40 km/hr exerts no lateral force on the rails. Find the lateral force exerted on the rails by an engine of mass 10^5 kg when travel..

Stress-sympathetic nervous system : Stress is the body’s response to a stressor such as an environmental condition or a stimulus. Stress is a caused by a challenge which the body reacts to it. the body's way to respond to stress is by sympathetic nervous system activation which results..

Provide the total costs for the revenue departments : Harry Dorffman owns and operates Harry's Abstracting Service. Harry's two revenue generating operations (Abstracting Services and Closing Services) are supported by two service departments: Clerical and Custodial. Costs in the service departments ..

User Account

All Pages