The financial statements for Lexington Service Company include the following items:

Compute the current ratio for 2016.(Round answer to two decimal places. )
A)1.10
B)0.91
C)3.83
D)6.23

Question

The financial statements for Lexington Service Company include the following items:

Compute the current ratio for 2016.(Round answer to two decimal places. )
A)1.10 
B)0.91 
C)3.83 
D)6.23

Quizplus · Accepted Answer

A)Current Ratio = Total current assets / Total current liabilities
Current Ratio = (Cash $45,000 + Short-term Investments $15,000 + Net Accounts Receivable $53,000 + Merchandise Inventory $45,000)/ (Accounts Payable $125,000 + Salaries Payable $18,000)
Current Ratio = $158,000 / $143,000
Current Ratio = 1.10

The Financial Statements for Lexington Service Company Include the Following