Walker corp. has current liabilities of $420,000, a quick ratio of .76, an inventory turnover of 5.2, and a current ratio of 1.3. is the cost of goods sold for the company.
Current assets=current ratio × current liabilities =1.3×420000 =546000. Quick ratio=(current assets-inventory)/current liabilities => 0.76=(546000-inventory)/420000 =>Inventory=546000-(.76*420000) =226800. Inventory turnover=cost of goods sold/inventory =>5.2=cost of goods sold/226800 =>cost of goods sold=5.2×226800 =1179360.
The direct costs of producing a business's products are referred to as its cost of goods sold (COGS). The cost of the labor and materials directly employed to make the goods are also included in this sum. It doesn't include indirect expenditures associated with the sales staff and distribution.
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