Valley Forge Corporation reported the following current accounts at December 31, 2011 (amounts in thousands):Cash………………………………………… $1,500Receivables……………………………….. 5,900Inventory………………………………….. 2,700Prepaid expenses……………………….. 1,000Accounts payable ………………………. 2,600Unearned revenue………………………. 1,600Accrued expenses payable …………… 1,900During January 2012, Valley Forge completed these selected transactions:Sold services on account, $9,000Depreciation expense, $400Paid for expenses, $7,300Collected from customers on account, $8,100Accrued expenses, $500Paid on account, $1,400Used up prepaid expenses, $700Compute Valley Forge’s net working capital and current ratio at December 31, 2011, and again at January 31, 2012. Did the net working capital and current ratio improve or deteriorate during January 2012? Comment on the level of the company’s net working capital and current ratio.View Solution:
Valley Forge Corporation reported the following current accounts



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