The Following Balance Sheet Information Is Provided for Greene Company

Multiple Choice

The following balance sheet information is provided for Greene Company for Year 2: $\begin{array}{lr}\text { Assets }\\\text { Cash } & \$ 5,400 \\\text { Accounts receivable } & 15,500 \\\text { Inventory } & 18,000 \\ \text { Prepaid expenses } & 1,600 \\\text { Plant and equipment, net of depreciation } & 20,200 \\\text { Land } &\underline{ 19,950}\\ \text { Total assets } &\underline{ \$ 80,650} \\\text { Liabilities and Stockholders'Equity }\\ \text { Accounts payable } & \$ 4,500 \\\text { Salaries payable } & 11,500\\\text { Bonds payable (due in ten years) } & 19,000 \\ \text { Common stock, no par } & 30,000 \\ \text { Retained earnings } &\underline{ 15,650} \\\text {Total liabilities and stockholders equity } &\underline{ \$ 80,650 }\\\end{array}$ What is the company's quick (acid-test) ratio?

A) 0.7
B) 1.4
C) 1.3
D) 3.8