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Financial ratios

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The following data are taken from the financial statements of R. Reid Company. The average number of shares of common outstanding for the year was $10,000. The following data are in the alphabetical order:

A/P $25,000
A/R 76,000
Cash 34,000
Gross Profit 185,000
Net income 60,000

Net sales $400,000
Other current liabilities 15,000
Salaries payable 4,000
Stock holder's equity 114,000
Total assets 285,000

Instructions
Compute the following:
(1) Current ratio
(2) Debt to total assets ratio
(3)Earnings per share
(4) working capital

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Solution Summary

This solution provides a detailed step by step explanation of the given accounting problem.

Solution Preview

1) current ratio=current asset/current liabilities=(cash+A/R)/(A/P+other current liabilities+salaries ...

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