Use Rizwi Corporation's list of accounts at December 31,2017 to answer the following question:
Rizwi Corporation
List of Accounts at December 31,2017
$\begin{array}{lrr}
\text { Cash } & \$ 30,000 &\text { Accumulated Depreciation } & \$ 12,000 \
\text { Merchandise } & 21,000 & \text { Notes Payable-Due } 12 / 31 / 2025 & 120,000 \
\text { Inventory } &&& \
\text { Land } & 40,000 &\text { Accounts Payable } & 14,000 \
\text { Buildings } & 80,000& \text { Equipment } & 33,000 \
\text { Accounts Receivable } & 25,000& \text { Notes Payable-Due } 07 / 01 / 2019 & 2,000
\end{array}$ What is Rizwi Corporation's current ratio?
A)0.48 to 1
B)2.00 to 1
C)2.55 to 1
D)2.86 to 1

Question

Use Rizwi Corporation's list of accounts at December 31,2017 to answer the following question: 
Rizwi Corporation
List of Accounts at December 31,2017
$\begin{array}{lrr}
\text { Cash } & \$ 30,000 &\text { Accumulated Depreciation } & \$ 12,000 \
\text { Merchandise } & 21,000 & \text { Notes Payable-Due } 12 / 31 / 2025 & 120,000 \
\text { Inventory } &&& \
\text { Land } & 40,000 &\text { Accounts Payable } & 14,000 \
\text { Buildings } & 80,000& \text { Equipment } & 33,000 \
\text { Accounts Receivable } & 25,000& \text { Notes Payable-Due } 07 / 01 / 2019 & 2,000
\end{array}$ What is Rizwi Corporation's current ratio?
A)0.48 to 1
B)2.00 to 1
C)2.55 to 1
D)2.86 to 1

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Current assets include Cash ($30,000), Merchandise Inventory ($21,000), and Accounts Receivable ($25,000), totaling $76,000. Current liabilities include Accounts Payable ($14,000) and Notes Payable due 07/01/2019 ($2,000), totaling $16,000. The current ratio is $76,000 / $16,000 = 4.75 to 1. However, since none of the options match this calculation, it seems there might be an error in the options provided.

Use Rizwi Corporation's List of Accounts at December 31,2017 to Answer