Accounting question, current ratio, quick ratio, Please help.?

Question

Information from River Corporation's balance sheet at December 31, 2008, and income statement for the year ended December 31, 2008, is as follows:




Cash
$
15,000

Cost of Goods Sold

515,000

Unearned Revenue

25,000

Rent Expense

24,000

Accounts Receivable, net

115,000

Accounts Payable

13,000

Equipment, net

165,000

Interest Payable

1,780

Net Income

48,000

Inventory

212,000

Salaries Payable

12,000

Short-term Investments

8,000

Office Supplies

1,250

Prepaid Insurance

6,000

Land

35,000

Long-term Notes Payable

60,000

Sales Revenue

1,825,000

Interest Expense

1,350

Insurance Expense

800


--------------------------------------------------------------------------------

Requirement 1:

Calculate River Corporation's current and quick ratios. (Round answer to 2 decimal places.)


Current ratio


Quick ratio




Requirement 2:

Calculate the corporation's accounts receivable turnover ratio. The Accounts Receivable balance at December 31, 2007, was $122,000. (Round answer to 2 decimal places.)


Accounts receivable turnover




Requirement 3:

On average, how many days does it take River to collect its receivables? (Round answer to 2 decimal places.)


Days to collect receivables

Answer 1

Requirement 1:
Calculate River Corporation's current and quick ratios. (Round answer to 2 decimal places.)

Current Assets
Cash 15,000
Accounts Receivable, net 115,000
Inventory 212,000
Short-term Investments 8,000
Office Supplies 1,250
Prepaid Insurance 6,000
Total CA $357,250

Current Liabilities
Unearned Revenue 25,000
Accounts Payable 13,000
Interest Payable 1,780
Salaries Payable 12,000
Total CL $51,780

Current ratio = CA/CL = 357,250/51,780 = 7.90

Quick ratio = (CA - Inventory)/CL =
(357,250 - 212,000)/51,780 = 2.81

Requirement 2:
Calculate the corporation's accounts receivable turnover ratio. The Accounts Receivable balance at December 31, 2007, was $122,000. (Round answer to 2 decimal places.)
Accounts receivable turnover = Net Sales/Ave. AR*=
1,825,000/167,000 = 10.93

*Average AR = (Beg. AR + End. AR)/2

Requirement 3:
On average, how many days does it take River to collect its receivables? (Round answer to 2 decimal places.)
Days to collect receivables = 365/AR turnover = 365/10.93 = 33.40 days

Answer 2

Accounting Current Ratio

Answer 3

Current Ratio Accounting

Answer 4

i'm not answering your question for you. find the ratios and plug in the numbers. they should be in your accounting book.
here's one: current assets/current liabilities