What is the current ratio after the payment of the dividend

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Answer each of the questions in the following unrelated situations.

(a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $485,000, what is the amount of current liabilities?

 Current Liabilities $

(b) A company had an average inventory last year of $196,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year?

Average Inventory $

(c) A company has current assets of $89,000 (of which $42,000 is inventory and prepaid items) and current liabilities of $42,000. What is the current ratio? What is the acid—test ratio? If the company borrows $14,000 cash from a bank on a 120—day loan, what will its current ratio be? What will the acid—test ratio be?

Current Ratio :1

Acid Test Ratio :1

New Current Ratio :1

(d) A company has current assets of $570,000 and current liabilities of $250,000. The board of directors declares a cash dividend of $196,000.

What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend?

Current ratio after the declaration but before payment :1

Current ratio after the payment of the dividend :1

Reference no: EM132322409

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