Answer:
1. Current Assets: 56, 830; Current Liabilities = $13,450
2. Working Capital= 4.23
3: Adequate
Explanation:
The question is into three parts;
Part 1: Calculate the current asset and current liability portion of Dunn's December 31, 2019.
Current assets are benefits that can be turned into cash within a year while current liabilities are obligations the company must settle within a year
Dunn's Current Assets: Cash in Hand + Short term securities + Inventory + account receivables + Prepaid rent
= $1,050 + $700 + $46,230 + $2,850 + $6,000
= $56, 830
Dunn's Current Liabilities: Interest payable + Accounts Payable
= $3,750 + $9,700 = $13,340
Part 2 : Working Capital Calculation
Working Capital is how adequately the company can meet its current obligations through it current benefits or assets
= Current Assets/ Current Liabilities
= $56, 830 / $13, 450 = 4.23
Part 3: What do the ratios tell about Dunn's Liquidity:
Dunn's asset can cover its liabilities about 4. 23 times making it more than adequate for the organisation to take care of its current obligations from its current assets in within the short term.