Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Cash and short-term investments$ 40,000Accounts receivable (net)30,000Inventory25,000Property, plant, and equipment 215,000Total assets$310,000 Liabilities and Stockholders' Equity Current liabilities$60,000Long-term liabilities95,000Stockholders' equity—Common 155,000Total liabilities and stockholders' equity$310,000 Income Statement Sales$90,000Cost of goods sold 45,000Gross margin$45,000Operating expenses 20,000Net income$25,000 Number of shares of common stock6,000Market price of common stock$20What is the current ratio?a) 0.78b) 0.67c) 1.58d) 1.42

CURRENT Ratio Current Ratio is the Ratio Between Current Assets & Current Liabilities. Current…

Answered: Brock Company's financial information…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

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Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.

Assets

Cash and short-term investments	$ 40,000
Accounts receivable (net)	30,000
Inventory	25,000
Property, plant, and equipment	215,000
Total assets	$310,000

Liabilities and Stockholders' Equity

Current liabilities	$60,000
Long-term liabilities	95,000
Stockholders' equity—Common	155,000
Total liabilities and stockholders' equity	$310,000

Income Statement

Sales	$90,000
Cost of goods sold	45,000
Gross margin	$45,000
Operating expenses	20,000
Net income	$25,000

Number of shares of common stock	6,000
Market price of common stock	$20

What is the current ratio?

a) 0.78

b) 0.67

c) 1.58

d) 1.42

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