Homework Answers
Ans:
Computation of current ratio:
Current ratio = (Current assets/Current liabilities)
*Current assets = $191,000
Current liabilities = $57,000
Current ratio = ($191,000/$57,000)
Current ratio = 3.35 times
Therefore, From the given options, correct answer is 2nd Option.
*Working notes:
Calculation of current assets:
| Current asset | Amount |
| Cash | $53,000 |
| Accounts receivables | $11,000 |
| Short term investments | $27,000 |
| Merchandise inventory | $100,000 |
| Total of current assets | $191,000 |
Thank you,
Feel free to comment incase of further help.
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