Question

Tllancia IOMALION Kelleher Crafts has provided the following data: E (Click the icon to view the financial information.) Read the requirements. Preceding Year Balance sheet item: Current Year Cash 16,000 $ 21,000 a. Current ratio 14.730 $ Short-term investments 25,500 Enter the formula on the first line, then calculate the ratio on the second line. (Round your answer to two decimal places, X.XX.) Net receivables 50,000 $ 76,140 Current liabilities Current assets Current ratio 74.000 $ Inventory 73,000 171,990 117,000 1.47 17,260 $ 9,500 Prepaid expenses 171,990 $ b. Acid-test ratio Total current assets 205,140 Total current liabilities 117,000 S 88,000 Enter the formula on the first line, then calculate the ratio on the second line. (Round your answer to two decimal places, XXX. Abbreviation use Acid-test Income statement: ratio Net credit sales 434,350 Cost of goods sold 323,400

Answer 1

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Statement showing Computations
Particulars	Amount
Current Assets	171,990.00
Current Liabilities	117,000.00
Current Assets/ Current Liabilities =	Current Ratio
171,990 / 117,000	1.47
b)
Cash + Short term investment + Net receivables/ Current Liabilities =	Acid Test ratio
(16,000 + 14,730 + 50,000)/ 117,000	0.69