Question

Jones Corp. reported current assets of $196,000 and current liabilities of $138,500 on its most recent balance sheet. The current assets consisted of $61,000 Cash; $42,100 Accounts Receivable; and $92,900 of Inventory. The acid-test (quick) ratio is

Answer 1

Answer:

0.74

Explanation:

Jones corporation reported a current assets of $196,000

The current liabilities is $138,500

The current assets consists of $61,000 cash , account receivable= $42,100, inventory= $92,900

Therefore the quick ratio can be calculated as follows

= cash + account receivables

= $61,000 + $42,100

= $103,100

$103,100/$138,500

= 0.74

Hence the acid test(quick ) ratio is 0.74