Reference no: EM132914997

Problem 1: Art Supplies, Inc. had the following asset account balances: Cash, $60,000; Short-term Investments, $120,000; Accounts Receivable, $70,000; and Inventory, $205,000. Current liabilities amounted to $325,000. What is Art Supplies' working capital ratio?

Option 1: Unable to determine
Option 2: 1.03
Option 3: 0.77
Option 4: 1.40
Option 5: $130,000

Problem 2: Palmetto Company had total sales of $125,000, of which, $25,000 were cash sales. Palmetto also had beginning and ending accounts receivable balances of $12,000 and $8,000, respectively. What is Palmetto's accounts receivable turnover ratio?

Option 1: 12.50x
Option 2: 15.63x
Option 3: 8.33x
Option 4: 10.00x