Jones Corp. reported current assets of $187,000 and current liabilities of $132,

Question

Jones Corp. reported current assets of $187,000 and current liabilities of $132,000 on its most recent balance sheet. The current assets consisted of $63,200 Cash; $44,800 Accounts Receivable; and $79,000 of Inventory. The acid-test (quick) ratio is:

1.4:1.

0.82:1.

0.58:1.

1:1.

0.60:1.

Jones Corp. reported current assets of $187,000 and current liabilities of $132,000 on its most recent balance sheet. The current assets consisted of $63,200 Cash; $44,800 Accounts Receivable; and $79,000 of Inventory. The acid-test (quick) ratio is:

Explanation / Answer

Given data,

Cash = $63200

Accounts Receivable = $44800

Current liabilities = $132000

Acid - test Ratio (Quick Ratio)

= Quick Assets / Current Liabilities

= (Cash + Accounts Receivable) / Current Liabilities

= (63200 + 44800) / 132000

= 108000 / 132000

= 0.818

Quick Ratio = 0.82 : 1

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