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Question
Use the balance sheets of Sando shown below to calculate the following ratios for 2013 (round to the hundredths):
(a) Current ratio
(b) Acid-test ratio
(c) Debt ratio
(d) Equity ratio
| SANDO COMPANY Balance Sheets December 31, 2013 | |
| Assets: | |
| Cash | $ 43,000 |
| Accounts receivable | 38,000 |
| Merchandise inventory | 61,000 |
| Prepaid insurance | 6,000 |
| Long-term investments | 49,000 |
| Plant assets (net) | 218,000 |
| Total assets | $415,000 |
| Liabilities and Equity: | |
| Current liabilities | $ 62,000 |
| Long-term liabilities | 45,000 |
| Common stock | 150,000 |
| Retained earnings | 158,000 |
| Total liabilities and equity | $415,000 |
Answer
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