Young Company has the following assets and liabilities:?? $\begin{array}{|l|r|}
\hline {\text { Assets }} & \
\hline \text { Cash } & \$ 35,000 \
\hline \text { Accounts receivable } & 15,000 \
\hline\text { Inventory } & 30,000 \
\hline \text { Equipment }& 50,000 \
\hline & \
\hline{\text { Liabilities }}\
\hline \text { Current portion of long-term debt } & \$ 10,000 \
\hline \text { Accounts payable } & 2,000 \
\hline \text { Long-term debt } & 25,000 \
\hline
\end{array}$ Determine the quick ratio (rounded to one decimal point).
A) 6.7
B) 13.0
C) 4.2
D) 3.5

Question

Young Company has the following assets and liabilities:?? $\begin{array}{|l|r|}
\hline {\text { Assets }} & \
\hline \text { Cash } & \$ 35,000 \
\hline \text { Accounts receivable } & 15,000 \
\hline\text { Inventory } & 30,000 \
\hline  \text { Equipment }& 50,000 \
\hline  & \
\hline{\text { Liabilities }}\
\hline \text { Current portion of long-term debt } & \$ 10,000 \
\hline \text { Accounts payable } & 2,000 \
\hline \text { Long-term debt } & 25,000 \
\hline
\end{array}$ Determine the quick ratio (rounded to one decimal point).
A) 6.7
B) 13.0
C) 4.2
D) 3.5

Quizplus · Accepted Answer

The quick ratio is calculated as (Cash + Accounts Receivable) / Current Liabilities. Here, it's ($35,000 + $15,000) / ($10,000 + $2,000) = $50,000 / $12,000 = 4.17, which rounds to 4.2.

Young Company Has the Following Assets and Liabilities Determine the Quick Ratio (Rounded to One Decimal Point)