The following items are reported on a company’s balance sheet:Cash                                             $100,000Marketable securities                      50,000Accounts receivable (net)                60,000Inventory                                         70,000Accounts payable                            140,000Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.

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Asked Dec 23, 2019
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The following items are reported on a company’s balance sheet:
Cash                                             $100,000
Marketable securities                      50,000
Accounts receivable (net)                60,000
Inventory                                         70,000
Accounts payable                            140,000
Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.

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Expert Answer

Step 1

a.

Compute current ratio....

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Current assets Current ratio Current liabilities $280, 000 S140,000 = 2.0

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