E10-5A. Current ratio and working capital. (LO 3)
Calculate the current ratio and the amount of working capital for Albert’s Hotels for the years given in the following comparative balance sheets. Although 2 year c is not much of a trend, what is your opinion of the direction of these ratios?
|
Albert Hotels Inc. Balance Sheet At December 31, 2008 and 2007 |
||
|
2008 |
2007 |
|
|
Current assets; |
||
|
Cash |
$98,000 |
$ 90,000 |
|
Accounts receivable net |
1 10,000 |
1 16,000 |
|
Inventory |
170,000 |
160,000 |
|
Prepaid expenses |
18,000 |
16,000 |
|
Total current assets |
396,000 |
382,000 |
|
Equipment net |
184,000 |
160,000 |
|
Total assets |
$580,000 |
$542,000 |
|
Total current liabilities |
$206,000 |
$223,000 |
|
Long- term liabilities |
1 19,000 |
1 17,000 |
|
Total liabilities |
325,000 |
340,000 |
|
Common stockholder’s equity |
90,000 |
90,000 |
|
Retained earnings |
155,000 |
112,000 |
|
Total liabilities and stockholder’s equity |
$580,000 |
$542,000 |