Question

a company reports the following selected accounts and balances after posting adjusting entries: accounts payable, $16,000 9-month, 8%, note payable, $46,000 income tax expense, $5,000 salaries and wages expense, $23,000 3-year, 10% note payable, $200,000 salaries and wages payable, $10,000 mortgage payable ($22,000 due next year), $1,000,000 rent payable, $8,000 its current assets are $210,000 at year-end. how much is its current ratio at year-end?

Answer 1

The company's current ratio at year-end is approximately 0.833.

Step-by-step explanation:

To calculate the current ratio, we need to divide the total current assets by the total current liabilities. The current assets include accounts payable, salaries and wages payable, rent payable, and current assets. The current liabilities include notes payable, mortgage payable, and income tax expense.

Therefore, the current ratio is calculated as follows:

Current Ratio = Current Assets / Current Liabilities

Given the information provided, the current assets total $210,000, and the current liabilities total $252,000. Plugging these values into the formula, we get:

Current Ratio = $210,000 / $252,000 = 0.833

Therefore, the current ratio at year-end is approximately 0.833.