Items (a) through (d) are based on the following information:
|
SHARKEY CORPORATION |
||
|
As of December 31, |
||
|
2009 |
2008 |
|
|
Cash |
$8,000 |
$60,000 |
|
Marketable securities |
32,000 |
8,000 |
|
Accounts receivable |
40,000 |
110,000 |
|
Inventory |
80,000 |
140,000 |
|
Net property, plant, and equipment |
240,000 |
280,000 |
|
Accounts payable |
60,000 |
100,000 |
|
Short term notes payable |
30,000 |
50,000 |
|
Cash sales |
1,500,000 |
1,400,000 |
|
Credit sales |
600,000 |
900,000 |
|
Cost of goods sold |
1,260,000 |
1,403,000 |
Required Answer the following multiple choice questions:
a. Sharkey’s acid test ratio as of December 31, 2009, is
1. 0.63.
2. 0.70.
3. 0.89.
4. 0.99.
b. Sharkey’s receivables turnover for 2009 is
1. 8 times.
2. 6 times.
3. 12 times.
4. 14 times.
c. Sharkey’s inventory turnover for 2009 is
1. 11.45 times.
2. 10.50 times.
3. 9.85 times.
4. 8.45 times.
d. Sharkey’s current ratio at December 31, 2009, is
1. 1.40.
2. 2.60.
3. 1.90.
4. 1.78.
e. If current assets exceed current liabilities, payments to creditors made on the last day of the year will
1. Decrease current ratio.
2. Increase current ratio.
3. Decrease working capital.
4. Increase working capital.