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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 69
Calculating the Current Ratio and the Quick (or Acid-Test) Ratio
Scherer Company provided the following income statements for its first 3 years of operation:
Chen Company has current assets equal to $5,000,000. Of these, $1,000,000 is cash, $2,250,000 is accounts receivable, $500,000 is inventory, and the remainder is marketable securities. Current liabilities total $4,000,000.
Required:
Note : Round answers to two decimal places.
1. Calculate the current ratio.
2. Calculate the quick ratio (acid-test ratio).
Scherer Company provided the following income statements for its first 3 years of operation:
Chen Company has current assets equal to $5,000,000. Of these, $1,000,000 is cash, $2,250,000 is accounts receivable, $500,000 is inventory, and the remainder is marketable securities. Current liabilities total $4,000,000.
Required:
Note : Round answers to two decimal places.
1. Calculate the current ratio.
2. Calculate the quick ratio (acid-test ratio).
Explanation
Verified
Verified
Current assets
Current assets are those...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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