Table 18-8
Peartree Company provides the following data:
Peartree Company
Balance Sheet
December 31,2017 Peartree Company
Income Statement
For the Year Ended December 31, 2017 * Sales revenue is all on account
-Refer to Table 18-8.How much is the current ratio at year-end 2017?
A) 17.5
B) 16.1
C) 3.5
D) 0.5

Question

Table 18-8
Peartree Company provides the following data:
 Peartree Company
Balance Sheet
December 31,2017  Peartree Company
Income Statement
For the Year Ended December 31, 2017  * Sales revenue is all on account
-Refer to Table 18-8.How much is the current ratio at year-end 2017?
A) 17.5 
B) 16.1 
C) 3.5 
D) 0.5

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. At year-end 2017, current assets are $560 million and current liabilities are $32 million. Therefore, the current ratio is $560 million / $32 million = 17.5.

Table 18-8 Peartree Company Provides the Following Data