The following balance sheet information is provided for Apex Company for Year 2: Assets Cash$5,400 Accounts receivable 15,500 Inventory 18,000 Prepaid expenses 1,600 Plant and equipment, net of depreciation 20,200 Land 19,950 Total assets$80,650 Liabilities and Stockholders' Equity Accounts payable$4,500 Salaries payable 11,500 Bonds payable (due in ten years) 19,000 Common stock, no par 30,000 Retained earnings 15,650 Total liabilities and stockholders' equity$80,650 What is the company's working capital?
A. $20,300
B. $24,500
C. $22,900
D. $4,900
Answer: B
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a. low fixed assets b. low profit margin c. high financial leverage d. high net worth
Considerations can only be monetary or economic in nature
Indicate whether the statement is true or false
Which of the following mathematical equations is used to compute the payables deferral period (DPO)?
A. Payables deferral period (DPO) = Payables turnover/360 B. Payables deferral period (DPO) = Payables turnover × 360 C. Payables deferral period (DPO) = Daily credit purchases/Accounts payable D. Payables deferral period (DPO) = Accounts payable/Daily credit purchases E. Payables deferral period (DPO) = Cost of goods sold/Accounts payables
The forms used to report a gain or loss on the sale of an asset depend on the classification of the asset being sold rather than on how the asset was used prior to sale.
Answer the following statement true (T) or false (F)