7. What is the current ratio if cash is $126,400, accounts receivable are $201,600, inventories are $313,800, fixed assets are $650,000, accounts

7. What is the current ratio if cash is $126,400, accounts receivable are $201,600, inventories are $313,800, fixed assets are $650,000, accounts payable are $186,200, accrued payroll and taxes is $137,900, short-term notes payable are $220,000 and long-term debt is $450,000?

A. 1.47

B. 1.18

C. 1.01

D. 0.85

E. 0.68

8. Which of the following statements is correct?

(x) If all other values remain the same, the quick ratio will decrease if customers use cash to purchase inventory from the firm.

(y) The cash ratio excludes inventory and accounts receivable since both of those items are not as liquid as cash and cannot be used to directly pay for the firm's liabilities.

(z) The inventory turnover ratio measures the number of dollars of sales produced per dollar of inventory.

A. (x), (y) and (z)

B. (x) and (y) only

C. (x) and (z) only

D. (y) and (z) only

E. (y) only

9. Which of the following activities will increase a firm's current ratio? A. Purchase inventory using cash. B. Buy equipment with a short-term bank loan.

C. Buy office supplies with a company charge card.

D. Accrued wages and taxes increase. E. None of these activities will increase a firm's current ratio.

10. A firm has sales of $2.5 million, net income of $650,000, total current assets of $800,000, and accounts receivable of $475,000. The firm's accounts receivable turnover is

A. 0.20 times.

B. 3.50 times.

C. 5.00 times.

D. 5.26 times.

E. 7.14 times.

11. A firm has current assets of $350,000, current liabilities of $200,000, cash of $65,000, fixed assets of $585,000, cost of goods sold of $250,000, and inventory of $75,000. The firm's inventory turnover is

A. 2.0 times.

B. 2.7 times.

C. 3.3 times.

D. 4.7 times.

E. 5.0 times.