Use the following to answer questions
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
$$\begin{array} { l r r }
\text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \
\text { Long-Tenn Arsets } & 790 & 720 \
\text { Curtert Liabilities } & 280 & 310 \
\text { Long-Term Liabilities } & 410 & 440 \
\text { Owners' Equity } & 445 & 335 \
\text { Net Sales } & 830 & 790 \
\text { Gross Margir } & 375 & 355 \
\text { Net Income } & 120 & 105
\end{array}$$
-The current ratio at the end of 2010 was:
A)1.23
B)1.18
C)0.97
D)0.81

Question

Use the following to answer questions 
Pioneer Industries gathered the following year-end data (in thousands) for 2010 and 2009:
 $$\begin{array} { l r r } 
\text { Curent Assets } & \frac { 2010 } { 2009 } & \frac { 2345 } { \$ 365 } \
\text { Long-Tenn Arsets } & 790 & 720 \
\text { Curtert Liabilities } & 280 & 310 \
\text { Long-Term Liabilities } & 410 & 440 \
\text { Owners' Equity } & 445 & 335 \
\text { Net Sales } & 830 & 790 \
\text { Gross Margir } & 375 & 355 \
\text { Net Income } & 120 & 105
\end{array}$$
-The current ratio at the end of 2010 was:
A)1.23
B)1.18
C)0.97
D)0.81

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities.

For 2010: 
Current assets = 2345 
Current liabilities = 280 
Current ratio = 2345/280 = 8.375

However, the amounts given are in thousands, so we need to adjust for this. 
Current assets = 2345000 
Current liabilities = 280000 
Current ratio = 2345000/280000 = 8.375

To simplify, we divide both values by 1000: 
Current assets = 2345 
Current liabilities = 280 
Current ratio = 2.345/0.28

Therefore, the current ratio at the end of 2010 was 1.23 (rounded to two decimal places). So, the best choice is A) 1.23.

Use the Following to Answer Questions Pioneer Industries Gathered

Use the Following to Answer Questions
Pioneer Industries Gathered