Excerpts from Zorra Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,370 and the cost of goods sold was $850.
-The acid-test ratio at the end of Year 2 is closest to:
A)1.81
B)2.62
C)1.69
D)1.36

Question

Excerpts from Zorra Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,370 and the cost of goods sold was $850.
-The acid-test ratio at the end of Year 2 is closest to:
A)1.81 
B)2.62 
C)1.69 
D)1.36

Quizplus · Accepted Answer

Quick assets = Cash + Marketable securities + Accounts receivable+ Short-term notes receivable
= $240 + $0 + $200 = $440
Acid-test ratio = Quick assets F1F1F1S1F1F1F10 Current liabilities
= $440 F1F1F1S1F1F1F10 $260 = 1.69

Excerpts from Zorra Corporation's Most Recent Balance Sheet Appear Below