Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,360 and the cost of goods sold was $810.The current ratio at the end of Year 2 is closest to:

A) 0.44
B) 0.50
C) 1.28
D) 1.23

Question

Excerpts from Colter Corporation's most recent balance sheet appear below:

Sales on account in Year 2 amounted to $1,360 and the cost of goods sold was $810.The current ratio at the end of Year 2 is closest to:

A) 0.44
B) 0.50
C) 1.28
D) 1.23

Nashea Unique · Accepted Answer

Final Answer : C, Explanation :  To calculate the current ratio, we need to divide current assets by current liabilities.Current assets = cash + accounts receivable = $240 + $300 = $540Current liabilities = accounts payable = $420Current ratio = current assets/current liabilities = $540/$420 = 1.28

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,360 and the cost of goods sold was $810.The current ratio at the end of Year 2 is closest to:

A) 0.44
B) 0.50
C) 1.28
D) 1.23

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Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,360 and the cost of goods sold was $810.The current ratio at the end of Year 2 is closest to:A) 0.44B) 0.50C) 1.28D) 1.23

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Learning Objectives

Learning Objectives

Related questions

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,360 and the cost of goods sold was $810.The current ratio at the end of Year 2 is closest to:

A) 0.44
B) 0.50
C) 1.28
D) 1.23