Question

According to Noble INC.’s balance sheet as of Dec. 2021, the company has $834,000 in Current Assets and $666,000 in Current Liabilities. The company’s quick ratio is 0.8. Calculate the company’s inventories as of Dec. 2021. (Round to the nearest dollar)

Answer 1

The company's inventories as of Dec. 2021 are approximately $301,200.

Step-by-step explanation:

The quick ratio is calculated using the formula:

Quick Ratio = (Current Assets - Inventories) / Current Liabilities

In this case, we know that the quick ratio is 0.8, the current assets are $834,000, and the current liabilities are $666,000. We need to solve for the inventories.

Let's rearrange the formula and solve for Inventories:

Inventories = Current Assets - (Quick Ratio * Current Liabilities)

Substituting the values given, we get:

Inventories = $834,000 - (0.8 * $666,000)

Inventories = $834,000 - $532,800

Inventories = $301,200

Therefore, the company's inventories as of Dec. 2021 are approximately $301,200.