Answer:
Chavez Company's current ratio = 2.202
Explanation:
CLASSIFYING THE BALANCE SHEET ACCOUNTS OF CHAVEZ COMPANY'S
CURRENT ASSETS – 44,040
• Cash 7,500
• Accounts receivable 28,500
• Prepaid insurance 4,040
• Office supplies 4,000
LONG-TERM ASSETS – 51,000
• Buildings 51,000
CURRENT LIABILITIES – 20,000
• Accounts payable 16,200
• Unearned services revenue 3,800
LONG-TERM LIABILITIES – 23,000
• Long-term notes payable 23,000
Current Ratio = Current Asset (CA) / Current Liabilities (CL)
Current Ratio = 44,040 / 20,000
Current Ratio = 2.202
