122) The accountant at Intellectual Property Inc. gathered the following selected accounting information:
20102011
Cash$ 35,000$33,000
Short-term investments 28,00029,000
Accounts receivable (net)33,00030,000
Inventory47,00050,000
Prepaid expenses7,0005,500
Accounts payable55,00062,000
Salaries payable10,0008,000
Income taxes payable3,0002,500
Bonds payable (due 2015)90,00090,000
Sales250,000230,000
Cost of goods sold180,000165,000
Required:
a. Compute the acid-test ratio for 2010 and 2011.
b. Compute the days' sales in average receivables for 2010 and 2011.
Net accounts receivable on December 31, 2009 was $27,000.
123) Vista Inc. had the following balances in selected accounts at the end of 2010 and 2011.
20102011
Cash$58,000$45,000
Short-term investments 46,00039,000
Accounts receivable54,00061,000
Allowance for uncollectible accounts3,5005,000
Inventory78,00098,000
Accounts payable91,000102,000
Wages payable17,00025,000
Income taxes payable4,5006,500
Note payable (due 2014)100,000100,000
Sales415,000525,000
Cost of goods sold225,000304,000
The accounts receivable at the end of 2009 were $50,000 and the allowance for uncollectible accounts was $2,500.
Required:
a.Calculate the acid test ratio for 2010 and 2011 for Vista Inc.
b.Calculate the days' sales in receivables for 2010 and 2011 for Vista Inc.
c.Determine whether the acid-test ratio improved or deteriorated from 2010 to 2011.
d.Determine whether the collection period increased or decreased from 2010 to 2011.
124) Given the following information calculate the 2010 and 2011 acid-test ratios for Smart-T. :
20102011
Cash$ 15,000$66,000
Short-term investments 48,00029,000
Accounts receivable (net)45,00045,000
Inventory9,00013,000
Prepaid expenses5,0005,500
Accounts payable40,00043,000
Salaries payable8,0009,000
Income taxes payable5,0005,500
Bonds payable (due 2013)80,00080,000
Sales250,000230,000
Cost of goods sold180,000165,000
Is Smart-T's liquidity situation improving?
Note: 2009 net accounts receivables = $40,000