Dennisport Corporation Has an Acid-Test Ratio of 2

Multiple Choice

Dennisport Corporation has an acid-test ratio of 2.5. It has current liabilities of $40,000 and noncurrent assets of $70,000. The corporation's current assets consist of cash, marketable securities, accounts receivable, prepaid expenses, and inventory. If Dennisport's current ratio is 3.1, its inventory and prepaid expenses must be:

A) $12,400
B) $24,000
C) $30,000
D) $40,000