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

Compute the acid-test ratio for 2016.(Round your answer to two decimal places)
A)0.96
B)0.78
C)0.86
D)0.69

Question

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

Compute the acid-test ratio for 2016.(Round your answer to two decimal places)
A)0.96 
B)0.78 
C)0.86 
D)0.69

Quizplus · Accepted Answer

B)Acid-test ratio = (Cash + Short-term investments + Net current receivables)/ Total current liabilities
Acid-test ratio = (Cash $44,000 + Short-term investments $13,500 + Net current receivables $52,000)/ (Accounts payable $128,000 + Salaries Payable $12,000)
Acid-test ratio = $109,500 / $140,000
Acid-test ratio = 0.78

The Financial Statements for Myers Service Company Include the Following