Question

Jones Corp. reported current assets of $191,000 and current liabilities of $136,000 on its most recent balance sheet. The current assets consisted of $62,400 Cash; $43,600 Accounts Receivable; and $85,000 of Inventory. The acid-test (quick) ratio is:

Answer 1

Answer:

acid-test ratio 1,4044

Explanation:

We are asked for a variation ofthe current ratio

whie current ratio is determinate like:

$\frac{current\: assets }{current\: liab}$

the acid-test will remove inventory from the current assets, leaving only cash, marketable securities and accounts receivables considered for the calculations:

191,000 current assets - 85,000 inventory = 106,000

136,000 current liabilities

191,600 / 136,000  = 1,4044