The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31,2017 and 2016: • 10,000 shares of common shares have been issued and outstanding since the company was established.They had a market value of $90 per share on December 31,2016,and they were selling for $91.50 on December 31,2017.
Refer to the table above.The current ratio for Hot Rolled Corporation on December 31,2017,was:
A) 0.80
B) 0.67
C) 1.45
D) 1.26

Question

The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31,2017 and 2016:  • 10,000 shares of common shares have been issued and outstanding since the company was established.They had a market value of $90 per share on December 31,2016,and they were selling for $91.50 on December 31,2017.
Refer to the table above.The current ratio for Hot Rolled Corporation on December 31,2017,was:
A) 0.80 
B) 0.67 
C) 1.45 
D) 1.26

Quizplus · Accepted Answer

To calculate the current ratio, we need to divide current assets by current liabilities.

On December 31, 2017: 
Current assets = $1,640,000 
Current liabilities = $1,300,000

Current ratio = Current assets ÷ Current liabilities 
Current ratio = $1,640,000 ÷ $1,300,000 
Current ratio = 1.26

Therefore, the current ratio for Hot Rolled Corporation on December 31, 2017, was 1.26. The correct choice is D.

The Following Data Represent Selected Information from the Comparative Income