acid test ratio

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 1BCRQ
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1.The acid test ratio in year 2021 is as follows:

A. 1,72:1
B. 2,61:1
C. 1,94: 1
D. 1,26:1
E. 1.31:1

The following information is extracted from the accounting records of Wango Ltd:
2021
2020
R R
Share capital: Ordinary
shares
82 000 114 000
Sales
100 000 120 000
Interest expense
2 000
3 000
Dividends
4 000
4 500
Profit before tax
42 000
49 000
Income tax expense
Retained earnings
16 000
18 000
48 500
23 500
Revaluation surplus
10 000
7 000
Current assets
71 000
80 000
Total assets
145 000 172 000
Current liabilities
27 200
26 300
Inventory
36 600
24 300
Transcribed Image Text:The following information is extracted from the accounting records of Wango Ltd: 2021 2020 R R Share capital: Ordinary shares 82 000 114 000 Sales 100 000 120 000 Interest expense 2 000 3 000 Dividends 4 000 4 500 Profit before tax 42 000 49 000 Income tax expense Retained earnings 16 000 18 000 48 500 23 500 Revaluation surplus 10 000 7 000 Current assets 71 000 80 000 Total assets 145 000 172 000 Current liabilities 27 200 26 300 Inventory 36 600 24 300
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