Final answer:
The current ratio is 3.05 and the acid-test ratio is 1.17 for Bauman, LLC based on the given year-end information.
Step-by-step explanation:
The current ratio is a measure of a company's ability to pay its short-term liabilities using its short-term assets. It is calculated by dividing current assets by current liabilities. In this case, the current assets are $70,200 (cash) + $12,800 (short-term investments) + $49,500 (accounts receivable) + $242,000 (inventory) + $18,000 (prepaid expenses) = $392,500, and the current liabilities are $100,500 (accounts payable) + $28,000 (other current payables) = $128,500. Therefore, the current ratio is 392,500/128,500 = 3.05.
The acid-test ratio, also known as the quick ratio, is a more conservative measure of a company's ability to pay its short-term liabilities. It excludes inventory from current assets, as inventory may take time to convert into cash. The acid-test ratio is calculated by dividing current assets minus inventory by current liabilities. In this case, the current assets minus inventory is $392,500 - $242,000 = $150,500. Therefore, the acid-test ratio is 150,500/128,500 = 1.17.