Exam 3 Practice Problems-2.docx - Accounting I Exam 3 Practice Problems Chapters 5 and 6 1 AJF Company reported the following year-end information

Exam 3 Practice Problems-2.docx - Accounting I Exam 3...

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Accounting I Exam 3 Practice Problems, Chapters 5 and 6 1. AJF Company reported the following year-end information:Cash…………………………………...………..$ 70,000Short-term investments………………………...24,000Accounts receivable…………………………....60,000Inventory………………………………..……...330,000Prepaid expenses……………………………….20,000Accounts payable………………………..……..110,000Other current payables………………………… 30,000 Required:a. Calculate the acid-test ratio for this company. b. If the industry average is 1.0, is AJF Company in a better or worse liquidity position than its competitors? 2. WRL Company reported the following information for the month of June: Sales…………………………………. $60,000 Sales discounts………………………. 200 Sales returns and allowances………… 2,000 Cost of goods sold…………………… 33,000 Required: a. Calculate this company's gross margin ratio. 1

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