Question

What is my current ratio? I keep getting 2.344 and it says it's not correct.

Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. NELSON COMPANY Unadjusted Trial Balance January 31 Credit Debit $ 18,350 14,000 5,300 2,200 42,600 $ 19, 250 17,000 5,000 26,000 2,050 115,800 Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Sales salaries expense Office salaries expense Insurance expense Rent expense-Selling space Rent expense-Office space Store supplies expense Advertising expense Totals 2,050 2,100 38,000 15,050 15,050 0 8,500 8,500 9,300 $183,050 $183,050

Answer 1

Current Ratio
	Current Assets	/	Current Liabilities	=	Current Ratio
	39,850.00	/	17,000.00	=	2.34	:1

Explanation
Current assets
Cash	18,350.00
Merchandise Inventory	14,000.00
Store supplies	5,300.00
Prepaid insurance	2,200.00
	39,850.00
Current Liabilities
Accounts payable	17,000.00