Question

Given the following information: Cash 29,000, Accounts Receivable $114,000, Inventory $113,000, Prepaid Expenses $6,000, Total capital assets $525,000, Total current liabilities $142,000, Long-term debt $289,000, Total shareholders' equity $356,000' Net sales $858,000, Cost of goods sold $513,000, Gross Margin $345,000, Net income $48,000. The acid test ratio is: a. 1.01 b. 1.85 c. 75% d. 55%

          Given the following information: Cash 29,000, Accounts Receivable $114,000, Inventory $113,000, Prepaid Expenses $6,000, Total capital assets $525,000, Total current liabilities $142,000, Long-term debt $289,000, Total shareholders' equity $356,000' Net sales $858,000, Cost of goods sold $513,000, Gross Margin $345,000, Net income $48,000.
The acid test ratio is:
a. 1.01
b. 1.85
c. 75%
d. 55%

Show more…

Given the following information: Cash 29,000, Accounts Receivable 114,000, Inventory113,000, Prepaid Expenses 6,000, Total capital assets525,000, Total current liabilities 142,000, Long-term debt289,000, Total shareholders' equity 356,000' Net sales858,000, Cost of goods sold 513,000, Gross Margin345,000, Net income 48,000.
The acid test ratio is:
a. 1.01
b. 1.85
c. 75%
d. 55%

Added by Bryan T.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Brooke Bussoletti

08/04/2023

Step 1

The acid test ratio, also known as the quick ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated by dividing the sum of cash, marketable securities (if any), and accounts receivable by the total Show more…

Show all steps

lock

Thanks for your feedback!

Given the following information: Cash $29,000, Accounts Receivable $114,000, Inventory $113,000, Prepaid Expenses $6,000, Total capital assets $525,000, Total current liabilities $142,000, Long-term debt $289,000, Total shareholders' equity $356,000, Net sales $858,000, Cost of goods sold $513,000, Gross Margin $345,000, Net income $48,000. The acid test ratio is: a. 1.01 b. 1.85 c. 75% d. 55%

Play audio

Feedback

Powered by NumerAI

Brooke Bussoletti and 62 other subject Principles of Accounting educators are ready to help you.

Ask a new question

Labs

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

Recommended Videos

Recommended Textbooks

Transcript

Ace is your personal tutor. It breaks down any question with clear steps so you can learn.

Start Using Ace

Continue solving this problem

Create a free account to:

View full step-by-step solution
Ask follow-up questions with Ace AI
Save progress and study later