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KengaRu [80]
3 years ago
6

Presented below is information related to Tolbert Company.

Business
1 answer:
Anni [7]3 years ago
6 0

Answer:

Option (c) is correct.

Explanation:

Given that,

Cash = $4,000

Short-term investments = $75,000

Accounts receivable = $61,000

Inventories = $110,000

Prepaid expenses = $30,000

Total current liabilities = $100,000

Current assets:

= Cash + Short-term investments + Accounts receivable

= $4,000  + $75,000  + $61,000

= $140,000

Therefore,

Acid-test ratio:

= Current assets ÷ Current liabilities

= $140,000 ÷ $100,000

= 1.4 to 1

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