Looking for answers? Westonci.ca is your go-to Q&A platform, offering quick, trustworthy responses from a community of experts. Discover the answers you need from a community of experts ready to help you with their knowledge and experience in various fields. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.
Sagot :
### Solution for Wilson Trucking Company
To calculate the current ratio, follow these steps:
#### (a) Calculation of the Current Ratio:
1. Current Assets:
- Cash: \[tex]$8,200 - Accounts Receivable: \$[/tex]16,500
- Office Supplies: \[tex]$2,000 The total of current assets is calculated by adding these amounts: \[ \text{Current Assets} = \$[/tex]8,200 + \[tex]$16,500 + \$[/tex]2,000 = \[tex]$26,700 \] 2. Current Liabilities: - Accounts Payable: \$[/tex]12,200
- Interest Payable: \[tex]$3,000 The total of current liabilities is calculated by adding these amounts: \[ \text{Current Liabilities} = \$[/tex]12,200 + \[tex]$3,000 = \$[/tex]15,200
\]
3. Current Ratio Calculation:
The current ratio is calculated by dividing the total current assets by the total current liabilities:
[tex]\[ \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{26,700}{15,200} \approx 1.76 \][/tex]
#### (b) Comparison with Competitor (Spalding):
The competitor, Spalding, has a current ratio of 1.5. Comparing the two ratios:
- Wilson Trucking Company: 1.76
- Spalding: 1.5
Wilson Trucking has a higher current ratio compared to Spalding, which suggests that Wilson Trucking is in a better position to pay off its short-term obligations.
### Summary:
- Current Assets: \[tex]$26,700 - Current Liabilities: \$[/tex]15,200
- Current Ratio: 1.76
When comparing to Spalding's current ratio of 1.5, Wilson Trucking is better able to pay its short-term obligations.
To calculate the current ratio, follow these steps:
#### (a) Calculation of the Current Ratio:
1. Current Assets:
- Cash: \[tex]$8,200 - Accounts Receivable: \$[/tex]16,500
- Office Supplies: \[tex]$2,000 The total of current assets is calculated by adding these amounts: \[ \text{Current Assets} = \$[/tex]8,200 + \[tex]$16,500 + \$[/tex]2,000 = \[tex]$26,700 \] 2. Current Liabilities: - Accounts Payable: \$[/tex]12,200
- Interest Payable: \[tex]$3,000 The total of current liabilities is calculated by adding these amounts: \[ \text{Current Liabilities} = \$[/tex]12,200 + \[tex]$3,000 = \$[/tex]15,200
\]
3. Current Ratio Calculation:
The current ratio is calculated by dividing the total current assets by the total current liabilities:
[tex]\[ \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{26,700}{15,200} \approx 1.76 \][/tex]
#### (b) Comparison with Competitor (Spalding):
The competitor, Spalding, has a current ratio of 1.5. Comparing the two ratios:
- Wilson Trucking Company: 1.76
- Spalding: 1.5
Wilson Trucking has a higher current ratio compared to Spalding, which suggests that Wilson Trucking is in a better position to pay off its short-term obligations.
### Summary:
- Current Assets: \[tex]$26,700 - Current Liabilities: \$[/tex]15,200
- Current Ratio: 1.76
When comparing to Spalding's current ratio of 1.5, Wilson Trucking is better able to pay its short-term obligations.
We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.