Question

The following items are reported on a company's balance sheet: Cash $234,100 Marketable securities 80,100 Accounts receivable 234,000 Inventory 183,100 Accounts payable 279,700 Round your answers to two decimal places. a. Determine the current ratio. b. Determine the quick ratio.

Answer 1

Answer

a	Current Ratio	2.61
b	Acid Test ratio	1.96

Calculations:

	Particulars	Amount
A	Current assets	$ 731,300
B	Current liabilities	$ 279,700
A/B	Current Ratio	2.61
	Particulars	Amount
A	Quick assets	$ 548,200
B	Current liabilities	$ 279,700
A/B	Acid Test ratio	1.96

Note:

	Particulars	Amount
A	Current assets	=$234,100+80,100+234,000+183,100
B	Current liabilities	$279700
	Particulars	Amount
A	Quick assets	=$234,100+80,100+234,000
B	Current liabilities	$279,700

In case of any doubt, please comment.