Question

In: Accounting

The following financial information isfor Chesapeake Corporation are for the fiscal years ending 2018 & 2017 (all balances are normal):


The following financial information isfor Chesapeake Corporation are for the fiscal years ending 2018 & 2017 (all balances are normal):

Item/Account

2018

2017

Cash

25,000

$24,000

Accounts Receivable

55,000

52,000

Inventory

44,000

48,000

Current Liabilities

85,000

42,000

Net Sales (all credit)

550,000

485,000

Cost of Goods Sold

288,000

265,000

Use this information to determine the number of current ratio as of December 31, 2018: (Round & enter your answers to one decimal place and enter the value.)


Solutions

Expert Solution

answer 1.5 times

current ratio=current asset/current liabilities

normally current asset included cash or cash equivalents,inventory,accounts recievable,prepaid liabilities etc..

here, current assets=cash+inventory+accounts recievable

current assets for 2018=$25000+$44000+$55000=$124000

normally current liabilities include accounts payable,short term debts,dividends etc..

current liabilities for 2018=$85000

current ratio=$124000/$85000=1.5 times


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