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Discussion 2 Week 2 Acct - E17-18 Answer A Current ratio C...

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E17-18: Answer: A: Current ratio 2007 2006 Cash $61,000 $47,000 Short-Term investments 28,000 0 Net receivables 122,000 116,000 Inventory 237,000 272,000 Total Assets 560,000 490,000 Total Liabilities 275,000 202,000 Long-term note payable 40,000 52,000 income from operations 165,000 158,000 interest expence 48,000 39,000 2.04 2.43 B: Acid-test ratio 2007 2006 Cash $61,000 $47,000 Short-Term investments 28,000 0 Net receivables 122,000 116,000 Inventory 237,000 272,000 Total Assets 560,000 490,000 Total Liabilities 275,000 202,000 Long-term note payable 40,000 52,000 income from operations 165,000 158,000 interest expence 48,000 39,000 1.3 1.24 C: Debt ratio 2007 2006 Cash $61,000 $47,000 Short-Term investments 28,000 0 Net receivables 122,000 116,000 Inventory 237,000 272,000 Total Assets 560,000 490,000 Total Liabilities 275,000 202,000 Long-term note payable 40,000 52,000 income from operations 165,000 158,000 interest expence 48,000 39,000 0.49 0.41
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D: Times-interest-earned ratio 2007 2006 Cash $61,000 $47,000 Short-Term investments 28,000 0 Net receivables 122,000 116,000 Inventory 237,000 272,000 Total Assets 560,000 490,000 Total Liabilities 275,000 202,000 Long-term note payable 40,000 52,000 income from operations 165,000 158,000 interest expence 48,000 39,000 3.44 4.05 E17-25A: Answer: 1. Compute the following ratios for 2009 and 2008: A: Current Ratio 2009 2008 Net Sales $462,000 $427,000 cost of goods sold 240,000 218,000 gross profit 222,000 209,000 operating expenses 136,000
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