Question

Jones Corp. reported current assets of $186,000 and current liabilities of $130,500 on its most recent balance sheet. The current assets consisted of $63,400 Cash; $45,100 Accounts Receivable; and $77,500 of Inventory. The acid-test (quick) ratio is:______

a. 1.4:1
b. 0.83:1
c. 0.58:1
d. 1:1
e. 0.59:1

Answer 1

Quick ratio will be 0.831

So option (B) will be correct answer

Step-by-step explanation:

We have given current assets = $186000

Current liabilities = $130500

It is given that current assets consist of $63400 cash, $45100 accounts receivable and $77500 of inventory

We have to find the acid-test quick ratio

Quick ratio is equal to
`=(total\ current\ assets-invebtory-\ prepaid\ expenses)/(current\ liabilities)`

So quick ratio is
`=(186000-77500)/(130500)=0.831`

So quick ratio will be 0.831

So option (B) will be correct answer