Week 1- Discussion

Liquidity Ratio
ACC C 204

1. Romaine Corporation's total current assets are Php300,000, its noncurrent assets are
Php570,000, its total current liabilities are Php270,000, its long-term liabilities are
Php360,000, and its stockholders' equity is Php240,000.

Required:
Compute the company's working capital. And current ratio.

2. Wayment Corporation's total current assets are Php310,000, its noncurrent assets are
Php680,000, its total current liabilities are Php270,000, its long-term liabilities are
Php460,000, and its stockholders' equity is Php260,000.

Required:
Compute the company's current ratio and working capital.

3. Data from Furnia Corporation's most recent balance sheet appear below:

Cash................................... Php13,000
Marketable securities........ Php21,000
Accounts receivables......... Php32,000
Inventory........................... Php52,000
Prepaid expenses............... Php16,000
Current liabilities................ Php118,000

Required:
Compute the company's working capital, current ratio and acid-test ratio.

4.Cozzolino Corporation has provided the following data:

This Year Last Year

Accounts receivable........... Php118,000 Php123,000
Inventory........................... Php141,000 Php165,000
Sales on account................ Php687,000
Cost of goods sold.............. Php455,000

Required:
Compute the (1) accounts receivable turnover and number of days in receivable,
(2) inventory turnover and number of days in inventory.
5. Data from Ringwald Corporation's most recent balance sheet and income statement appear
below:
This Year Last Year
Accounts receivable........... Php118,000 Php103,000
Inventory........................... Php164,000 Php173,000
Sales on account................ Php727,000
Cost of goods sold.............. Php481,000

Required:
Compute the (1) accounts receivable turnover and the average collection period
(2) inventory turnover and number of days in inventory.

6. Hsieh Corporation has provided the following data:

This Year Last Year

Accounts receivable........... Php104,000 Php115,000
Inventory........................... Php150,000 Php157,000
Sales on account................ Php879,000
Cost of goods sold.............. Php575,000

Required:
Compute the (1) accounts receivable turnover and the average collection period
(2) inventory turnover and number of days in inventory.

Data from Buttler Corporation's most recent balance sheet and income statement
appear below:

This Year Last Year

Accounts receivable........... Php134,000 Php138,000
Inventory........................... Php151,000 Php171,000
Sales on account................ Php864,000
Cost of goods sold.............. Php675,000

Required:
Compute the (1) accounts receivable turnover and the average sale period
(2) inventory turnover and number of days in inventory.