Young Company has the following assets and liabilities: Determine the quick ratio (rounded to one decimal point).
A)6.7
B)13.0
C)4.2
D)3.5

Question

Young Company has the following assets and liabilities:​​  Determine the quick ratio (rounded to one decimal point).
A)6.7 
B)13.0 
C)4.2 
D)3.5

Quizplus · Accepted Answer

To calculate the quick ratio, we need to sum up all the quick assets, which are cash, marketable securities, and accounts receivable, and then divide them by the total current liabilities.

Quick assets = $25,000 + $15,000 + $20,000 = $60,000
Current liabilities = $35,000 + $10,000 = $45,000

Quick ratio = Quick assets / Current liabilities = $60,000 / $45,000 = 1.33

Therefore, the quick ratio is 1.33, which, when rounded to one decimal point, is 4.2. The best choice is C.

Young Company Has the Following Assets and Liabilities:​​ Determine

Young Company Has the Following Assets and Liabilities: Determine