Given the following information, calculate the inventory for J&C videos. Quick ratio = 1.2; Current assets = $12,000; Current ratio = 2.5

Question

Quizplus · Accepted Answer

Inventory = Current assets - (Current liabilities + Quick assets)= $12,000 - (Current liabilities + ($12,000 / 1.2))= $12,000 - (Current liabilities + $10,000)= $12,000 - Current liabilities - $10,000= $2,000 - Current liabilitiesCurrent ratio = Current assets / Current liabilities2.5 = $12,000 / Current liabilitiesCurrent liabilities = $12,000 / 2.5Current liabilities = $4,800Inventory = $2,000 - $4,800Inventory = -$2,800Since inventory cannot be negative, there is an error in the given information.

Given the Following Information, Calculate the Inventory for J&C Videos