Following information is available for Nick Company for the year ended 2020: Additional information: Amount for accounts receivable (net) at the end of 2019 was $57,000. The inventory as of 01st of January 2020 is calculated as $22,000. Required: Calculation of the following for the year ended 2020: a) Working capital b) Quick ratio c) Inventory turnover ratio. d) Accounts receivable turnover ratio and number of days in the collection assuming 366 days a year.
Following information is available for Nick Company for the year ended 2020: Additional information: Amount for accounts receivable (net) at the end of 2019 was $57,000. The inventory as of 01st of January 2020 is calculated as $22,000. Required: Calculation of the following for the year ended 2020: a) Working capital b) Quick ratio c) Inventory turnover ratio. d) Accounts receivable turnover ratio and number of days in the collection assuming 366 days a year.
Chapter5: Ethical Responsibilities Of Independent Auditors
Section5.6: Richard Grimes, Staff Accountant
Problem 1Q
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Question
Following information is available for Nick Company for the year ended 2020:
Additional information:
- Amount for accounts receivable (net) at the end of 2019 was $57,000.
- The inventory as of 01st of January 2020 is calculated as $22,000.
Required:
Calculation of the following for the year ended 2020:
a)
b) Quick ratio
c) Inventory turnover ratio.
d) Accounts receivable turnover ratio and number of days in the collection assuming 366 days a year.
![Assets
Cash
$44,000
Accounts receivable
(-) Allocation for doubtful debts
Inventory
Equipment
35,000
-1,500
33,500
14,000
105,000
88,000|
Machine
Liabilities
Accounts payable
Long term debt
Long term business loan
40,000
80,000
40,000
Income
Sale
400,000
280,000
COGS
Expenses
Electrcity expenses
Salary and wages
11,000
5,800](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc24347c3-be54-4124-b186-a6907c88fb14%2Fc02225bd-5116-4ca1-b2f0-733d25ea499d%2Fydbrktw_processed.png&w=3840&q=75)
Transcribed Image Text:Assets
Cash
$44,000
Accounts receivable
(-) Allocation for doubtful debts
Inventory
Equipment
35,000
-1,500
33,500
14,000
105,000
88,000|
Machine
Liabilities
Accounts payable
Long term debt
Long term business loan
40,000
80,000
40,000
Income
Sale
400,000
280,000
COGS
Expenses
Electrcity expenses
Salary and wages
11,000
5,800
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