1. The following are data from Fluffy Trading on December 31, 2016.

Cash                                          Php 410 000

Trade Receivables                           120 000
Merchandise Inventory                   235 000
Property, Plant and Equipment     455 000
Trade Payables                                 265 000

Required :  COMPUTE THE FOLLOWING:

A.  CURRENT RATIO

Current Ratio = 765, 000

265, 000

Current Ratio = 2.9

B.  ACID-TEST RATIO

 Acid-test Ratio = 530, 000

265, 000

Acid-test Ratio = 2

2.  Refer to Number 1.  On December 31, 2017, Fluffy Trading's Trade Receivables amounted to Php 145 000 and
Merchandise Inventory was Php 265 000.  Net Sales was Php 1 250 000 and Cost of Goods Sold was Php 375 000

REQUIRED :  COMPUTE THE FOLLOWING:

A.  RECEIVABLE TURNOVER

A/R Turnover Ratio = Net sales

Ave. A/R

A/R Turnover Ratio = 1 250 000

145 000
A/R Turnover Ratio = 8.6 times

B.  AVERAGE COLLECTION PERIOD

Days sales Outstanding = x 145 000 365

1 250 000
Days sales Outstanding = 42.34 days

C.  INVENTORY TURNOVER

Cost of goods sold

Inventory Turnover Ratio = Ave. Inventory

Inventory Turnover Ratio = 375 000

250 000

Inventory Turnover Ratio = 1.5

D.  AVERAGE SALES PERIOD

Days Sales in Inventory = Ending Inventory x 365

Cost of goods sold

Days Sales in Inventory = 265 000 x 365

375 000

Days Sales in Inventory = 257.9