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Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
Edition 4ISBN: 978-0324380767Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
Edition 4ISBN: 978-0324380767 Exercise 53
Current Ratio and Quick (Acid-Test) Ratio
Smith Company has current assets equal to $250,000. Of these, $135,000 is cash, $55,000 is accounts receivable, and the remainder is inventories. Current liabilities total $200,000.
Required:
Note: Round answers to two decimal places.
1. Compute the current ratio.
2. Compute the quick (acid-test) ratio.
Smith Company has current assets equal to $250,000. Of these, $135,000 is cash, $55,000 is accounts receivable, and the remainder is inventories. Current liabilities total $200,000.
Required:
Note: Round answers to two decimal places.
1. Compute the current ratio.
2. Compute the quick (acid-test) ratio.
Explanation
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Verified
a. Current ratio indicates liquidity pos...
Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
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