Pritchett Co. reported the following year-end data: cash of $15,000; short-term investments of $5,000; accounts receivable (current) of $8,000; inventory of $20,000; prepaid (current) assets of $6,000; and total current liabilities of $20,000. Compute the (a) current ratio and (b) acid-test ratio. Round to one decimal.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 9BE
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Pritchett Co. reported the following year-end data: cash of $15,000; short-term investments of $5,000; accounts
receivable
(current) of $8,000; inventory of $20,000; prepaid (current) assets of $6,000; and total
current liabilities of $20,000. Compute the (a) current ratio and (b) acid-test ratio. Round to one decimal.

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