Explore BrainMass

Explore BrainMass

    Spartan Sportswear's Current Assets

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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

    © BrainMass Inc. brainmass.com June 3, 2020, 9:11 pm ad1c9bdddf

    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.