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Working Capital and Current Ratio

The balance sheet of Kapinski Inc. includes the following items:

Cash	$23,000	Accounts payable	$ 84,900
Accounts receivable	43,000	Salaries payable	3,200
Inventory	75,000	Capital stock	100,000
Prepaid insurance	2,800	Retained earnings	35,700
Land	80,000
Required

1. Determine the current ratio and working capital.

2. Kapinski appears to have a positive current ratio and a large net working capital. Why would it have trouble paying bills as they come due?

3. Suggest three things that Kapinski can do to help pay its bills on time.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91624154

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