Homework Answers
Hello,
Working Capital = Current Asset - Current
Liability|
Current Asset = Accounts Receivable + Inventory + Prepaid
Expense
Current liability = Accounts payable + Note payabke due in 10 month
+ Wages Payable
Current Asset = 30000 + 80000 + 6000 = 116000
Current Liability = 30000 + 25000 +5000 = 60000
1) Working Capital = 116000-60000 = 56000
2)Current ratio = current Asset / current Liability
Current ratio = 116000 / 60000 =1.9333
3) Quick Asset = Current Asset - Inventory - Prepaid
Insurance
Quick Asset = 116000- 800000 - 6000 = 30000
Quick ratio = Quick Asset / Current Liability
QR = 30000 / 60000 = 0.5
I hope this clear your doubt.
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