Using the following year-end information for Calvin's Clothing, calculate the current ratio and acid-test ratio for...

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Using the following year-end information for Calvins Clothing, calculate the current ratio and acid-test ratio for the busin

business accounting

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Answer 1

Answer #1

Current Assets = Cash + Short term Investment + Accounts Receivable + Inventory + Prepaid Expense

= 51,680 + 8,000 + 46,000 + 150,000 + 8,520

= $264,200

Current Liabilities = Accounts Payable + Other current payables

= 102,000 + 30,100

= $132,100

Current Assets = Current Assets/Current Liabilities = 264,200/132,100 = 2.00

Acid-Test Ratio = (Current Asset-Inventory)/Current Liabilities

(264,200-150,000)/132,100

Acid Test Ratio = 0.86

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Answer 2

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