Use the Balance Sheets of Sando Shown Below to Calculate

Essay

Use the balance sheets of Sando shown below to calculate the following ratios for 2010 (round to the hundredths):
(a)Current ratio.
(b)Acid-test ratio.
(c)Debt ratio.
(d)Equity ratio.
$\begin{array}{c} \text { Sando Company}\\ \text { Balance Sheets}\\ \text { December 31,2010}\\\begin{array}{|l|r|}\hline \text { Cash } & \$ 43,000 \\\hline \text { Accounts receivable } & 38,000 \\\hline \text { Merchandise inventory } & 61,000 \\\hline \text { Prepaid insurance } & 6,000 \\\hline \text { Long-term investments } & 49,000 \\\hline \text { Plant assets (net) } & 218,000 \\\hline \text { Total assets } & \$ 415,000 \\\hline\\\hline \text { Liabilities and Equity: } & \\\hline \text { Current liabilities } & \$ 62,000 \\\hline \text { Long-term liabilities } & 45,000 \\\hline \text { Common stock } & 150,000 \\\hline \text { Retained earnings } & \underline{158,000} \\\hline \text { Total liabilities and equity } & \$ 415,000\\\hline\end{array}\end{array}$