Agnes Company reported the following data: $$\begin{array} { l r }
\text { Quick assets } & \$ 55,000 \
\text { Current assets } & 150,000 \
\text { Total liabilities } & 300,000 \
\text { Average net receivables } & 12,600 \
\text { Beginning inventory } & 38,000 \
\text { Long-term liabilities } & 200,000 \
\text { Net credit sales } & 126,000 \
\text { Cost of goods sold } & 84,000 \
\text { Ending inventory } & 46,000
\end{array}$$ What was the current ratio?
A) 0.5
B) 1.5
C)2.5
D)0.75

Question

Agnes Company reported the following data: $$\begin{array} { l r } 
\text { Quick assets } & \$ 55,000 \
\text { Current assets } & 150,000 \
\text { Total liabilities } & 300,000 \
\text { Average net receivables } & 12,600 \
\text { Beginning inventory } & 38,000 \
\text { Long-term liabilities } & 200,000 \
\text { Net credit sales } & 126,000 \
\text { Cost of goods sold } & 84,000 \
\text { Ending inventory } & 46,000
\end{array}$$ What was the current ratio?
A) 0.5
B) 1.5
C)2.5
D)0.75

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by total liabilities. Here, the current assets are $150,000 and total liabilities are $300,000. So, the current ratio is $150,000 / $300,000 = 0.5. However, the correct calculation should be $150,000 / ($300,000 - $200,000) = 1.5, considering only current liabilities.

Agnes Company Reported the Following Data What Was the Current Ratio? A) 0

Agnes Company Reported the Following Data What Was the Current Ratio?
A) 0