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Watkins Inc. has the following assets at the end of Year One: Cash, $400; Inventory, $730; Prepaid Rent, $460; Equipment (net book value), $4,000. Watkins also has the following liabilities at the end of Year One: Accounts Payable, $560; Rent Payable, $200; Note Payable, due on June 1, Year Four, $3,500. At the end of Year One, what is Watkins’s current ratio?

Watkins Inc. has the following assets at the end of Year One: Cash, $400; Inventory, $730; Prepaid Rent, $460; Equipment (net book value), $4,000. Watkins also has the following liabilities at the end of Year One: Accounts Payable, $560; Rent Payable, $200; Note Payable, due on June 1, Year Four, $3,500. At the end of Year One, what is Watkins’s current ratio?

College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter1: Asset, Liability, Owner’s Equity, Revenue, And Expense Accounts
Section: Chapter Questions
Problem 2E: Determine the following amounts: a. The amount of the liabilities of a business that has 60,800 in...
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Watkins Inc. has the following assets at the end of Year One:

Cash, $400; Inventory, $730; Prepaid Rent, $460; Equipment (net book value), $4,000.

Watkins also has the following liabilities at the end of Year One:

Accounts Payable, $560; Rent Payable, $200; Note Payable, due on June 1, Year Four, $3,500.

At the end of Year One, what is Watkins’s current ratio?

 

 
 
Responses
  • 1.49 to 1.0
  • 1.31 to 1.0
  • 2.09 to 1.0
  • 1.14 to 1.00
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