Question

The Shoe Store has cash of $300, accounts receivable of $700, accounts payable of $800, inventory of $1,300, long-term debt of $1,900, and notes payable in three months of $500. What is the current ratio?

Answer 1

Answer:

Current ratio = 1.77

Explanation:

given data

cash = $300

accounts receivable = $700

accounts payable = $800

inventory = $1,300

long-term debt = $1,900

notes payable 3 months = $500

solution

first we get here Current Assets that is

current assets  = $300 + $700 + $1300

current assets = $2300  

and now we get current liabilities that is

current liabilities  = $800 + $500

current liabilities  = $1300

so now we get Current ratio that is

Current ratio = $\frac{2300}{1300}$

Current ratio = 1.77