Answer each of the questions in the given unrelated situations.
(Problem 1) The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $496,400, what is the amount of current liabilities?
(Problem 2) A company had an average inventory last year of $158,100 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover is 7 this year, what will average inventory have to be during the current year?
(Problem 3) A company has current assets of $87,860 (of which $41,900 is inventory and prepaid items) and current liabilities of $44,950. Compute the following ratios.
What is the current ratio?
What is the acid-test ratio?
If the company borrows $17,460 cash from a bank on a 120-day loan, what will its current ratio be?
What will the acid-test ratio be?
(Problem 4) A company has current assets of $588,200 and current liabilities of $213,900. The board of directors declares a cash dividend of $161,300.
What is the current ratio after the declaration but before payment?
What is the current ratio after the payment of the dividend?