Nkululeko J. Ntshanga owns a manganese ore mining business

B-04.09

Nkululeko J. Ntshanga owns a manganese ore mining business in South Africa. He is
interested in attracting additional investors to obtain financing for planned expansion.
Some potential investors have expressed a concern that money is really being sought to
address liquidity problems being faced by Nkululeko's company.
To alleviate this concern Nkululeko provided the following complete list of assets and
liabilities of the company. The currency unit is the South African Rand. Use this
information to determine the company's current assets, current liabilities, working capital,
current ratio, and quick ratio. Based on your calculations, does it appear that the
company is experiencing liquidity problems?

Accumulated Depreciation
Prepaid Rent

R 4,569,000
45,800

Note Payable (due in 3 months)

100,000

Accounts Receivable

468,000

Accounts Payable

255,000

Patent

3,000,000

Cash

790,000

Supplies

134,800

Unearned Revenues

133,000

Equipment
Interest Payable
Loan Payable (due in 3 years)

8,777,600
45,000
1,500,000

Name:
Date:

B-04.09

Section:

Current
Assets
Accumulated Depreciation R 4,569,000
Prepaid Rent

45,800

Note Payable (due in 3 mo

100,000

Accounts Receivable

468,000

Accounts Payable

255,000

Patent

3,000,000

Cash

790,000

Supplies

134,800

Unearned Revenues

133,000

Equipment
Interest Payable

8,777,600
45,000

Loan Payable (due in 3 yea 1,500,000

Working Capital :

Current Ratio:

Quick Ratio:

Quick Assets

Current
Liabilities