Acc291 Financial Accounting: E10-7 The following financial data were reported by 3M Company

Acc291 Principles of Accounting
Week 3

E10-7
The following financial data were reported by 3M Company for 2007 and 2008 ($ in millions).

3M Company
Balance Sheets (partial)
2008 2007

Current Assets
Cash and cash equivalents 1,849 1,896
Accounts receivable, net 3,195 3,362
Inventories 3,013 2,852
Other current assets 1,541 1,728
Total current assets 9,598 9,838

Current Liabilities 5,839 5,362

Instructions:
a. Calculate the current ratio and working capital for 3M for 2007 and 2008. (Round current ratio to 2 decimals, e.g. 10.50. Round other answers to 0 decimal places, e.g. 125).
b. Suppose that at the end of 2008 3M management used $300 million cash to pay off $300 million of accounts payable. Calculate the revised current ratio and working capital.
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