Using the following balance sheet and income statement data what is the current ratio? $$\begin{array}{l}
\begin{array} { l r l r }
\text { Current assets } & \$ 32,000 & \text { Net income } & \$ 42,000 \
\text { Current liabilities } & 16,000 & \text { Stockholders' equity } & 78,000 \
\text { Average assets } & 160,000 & \text { Total liabilities } & 42,000
\end{array}\
\text { Total assets } \quad 120,000
\end{array}$$
A)2.0 : 1
B)2.6 : 1
C)0.5 : 1
D)2.9 : 1

Question

Using the following balance sheet and income statement data what is the current ratio? $$\begin{array}{l}
\begin{array} { l r l r } 
\text { Current assets } & \$ 32,000 & \text { Net income } & \$ 42,000 \
\text { Current liabilities } & 16,000 & \text { Stockholders' equity } & 78,000 \
\text { Average assets } & 160,000 & \text { Total liabilities } & 42,000
\end{array}\
\text { Total assets } \quad 120,000
\end{array}$$
A)2.0 : 1
B)2.6 : 1
C)0.5 : 1
D)2.9 : 1

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities: $32,000 / $16,000 = 2.0 : 1$.

Using the Following Balance Sheet and Income Statement Data What