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If the Golden Braid Bookstore has a current (or working capital) ratio of 8.25:1, $40,000 in accounts receivable, $340,000 in cash, $65,000 in accounts payable and $15,000 in other current liabilities, how much inventory do they have?a) $55,000b) $280,000c) $825,000d) $34,000

Respuesta :

TomShelby

Answer:

inventory               280,000

Explanation:

current liaiblities:

65,000 A/P

15,000 other current liaiblities

total 80,000

As the rate is 8.25:1

There is 8.25 times as much current asset than liabilities:

80,000 x 8.25 = 660,000 current assets

We subtract from this the know values of current asset and solve for inventory:

current assets      660,000

A/R                         (40,000)

cash                     (340,000)

inventory               280,000

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