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Spartan Sportswear's Current Assets

Spartan Sportswear's current assets consist of cash, marketable securities, accounts receivable, and inventories. The following data was abstracted from a recent financial statement:

Inventories $180,000
Total assets $720,000
Current ratio 2.75
Acid-test ratio 1.5
Debt to equity ratio 1.4

Compute the following for Spartan:
a. Current Assets
b. Shareholders' Equity
c. Long-Term Assets
d. Long-Term Liabilities

Solution Preview

a. Current Assets
Inventories = (Current ratio-Acid test ratio)
180000 = (2.75-1.5)
180000 = 1.25 times of Current Liabilities
Current Liabilities = 180000/1.25

Current Assets = ...

Solution Summary

This solution calculates the current assets, shareholders' equity, long-term assets, and liabilities for Spartan Sportswear.