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Highly Suspect Corp. has current liabilities of $419,000, aquick ratio of 1.40, inventory turnover of...

Highly Suspect Corp. has current liabilities of $419,000, a quick ratio of 1.40, inventory turnover of 4.30, and a current ratio of 3.70. What is the cost of goods sold for the company?

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Expert Solution

Quick Ratio = Quick Assets / Current Liabilities

1.40 = Quick Assets / 419,000

Quick Assets = 419,000 * 1.40

Quick Assets = 419,000 * 1.40

Quick Assets = $ 586,600

Current Ratio = Current Assets / Current Liabilities

3.70 = Current Assets / 419,000

Current Assets = 419,000 * 3.70

Current Assets = 1,550,300

Inventory = Current Assets - Quick Assets

              = 1,550,300 - 586,600

              = 963,700

Inventory turnover ratio = Cost of good sold / inventory

4.30 = Cost of good sold / 963,700

Cost of good sold = 963,700 * 4.30

                           = $ 4,143,910 answer

jeff jeffy answered 2 years ago
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