Financial Statements for Marcell Company Appear Below -Marcell Company's Acid-Test (Quick)ratio at the End of Year 2

Multiple Choice

Financial statements for Marcell Company appear below:

$\begin{array}{|l|r|}\hline &\begin{array}{r}\text { Marcell Company } \\\text { Income Statement }\\\text { For the Year Ended December 31, Year } \\2 \\\text { (dollars in thousands) } \\\end{array} \\\hline \text { Sales (All on Account) } & \$ 2550 \\\hline \text { Costs of Goods Sold } & \$ 1780 \\\hline \text { Gross Margin } & \$ 770 \\\hline \text { Operating Expenses } & \$ 300 \\\hline \text { Net Operating Income } & \$ 470 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 420 \\\hline \text { Income Taxes (30\%) } & \$ 126 \\\hline \text { Net Income } & \$ 294 \\\hline\end{array}$


-Marcell Company's acid-test (quick) ratio at the end of Year 2 was closest to which of the following?

A) 0.33 to 1.
B) 0.60 to 1.
C) 0.74 to 1.
D) 1.35 to 1.