A Corporation Reports the Following Year-End Balance Sheet Data Calculate the Corporation's Current Ratio and Its Acid-Test Ratio

Essay

A corporation reports the following year-end balance sheet data:
$$\begin{array} { | l | r | l | r | } \hline \text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 64,000 \\\hline \text { Accounts receivable } & 35,000 & \text { Long-term liabilities } & 72,000 \\\hline \text { Inventory } & 60,000 & \text { Common stock } & 100,000 \\\hline \text { Equipment } & 150,000 & \text { Retaired earnings } & 49,000 \\\hline \text { Total assets } & \$ 285,000 & \text { Total liabilities and equity } & \$ 285,000 \\\hline\end{array}$$
Calculate the corporation's current ratio and its acid-test ratio.