The financial statements for Silver Service Company include the following items: Compute the acid-test ratio for 2018.(Round your answer to two decimal places)
A)0.92
B)0.81
C)0.93
D)0.66

Question

The financial statements for Silver Service Company include the following items:  Compute the acid-test ratio for 2018.(Round your answer to two decimal places)
A)0.92 
B)0.81 
C)0.93 
D)0.66

Quizplus · Accepted Answer

Acid-test ratio = (Cash + Short-term investments + Net current receivables)/ Total current liabilities
Acid-test ratio = (Cash $40,000 + Short-term investments $20,500 + Net current receivables $53,000)/ (Accounts payable $122,000 + Salaries Payable $18,000)
Acid-test ratio = $113,500 / $140,000
Acid-test ratio = 0.81

The Financial Statements for Silver Service Company Include the Following