Walker Company has the following assets on January 1, 2017 and January 1, 2016.
$$\begin{array} { l r r }
& 1 / 1 / 17 & 1 / 1 / 16 \
\hline \text { Cash } & \$ 451,000 & \$ 366,000 \
\text { Accounts receivable } & 302,000 & 333,000 \
\text { Marketable securities } & 36,000 & 30,000 \
\text { Irventory } & 87,000 & 105,000 \
\text { Net plant and equipment } & 120,000 & 96,000
\end{array}$$
If Walker's quick ratio is 3.00 for 2017, what is the amount of its current liabilities?
A)$325,000
B)$263,000
C)$285,000
D)There is not enough information to answer this question.Solution (in thousands):
Quick ratio = ($451 + $302 + $36) / x = 3.0
X = $263

Question

Walker Company has the following assets on January 1, 2017 and January 1, 2016.
$$\begin{array} { l r r } 
& 1 / 1 / 17 & 1 / 1 / 16 \
\hline \text { Cash } & \$ 451,000 & \$ 366,000 \
\text { Accounts receivable } & 302,000 & 333,000 \
\text { Marketable securities } & 36,000 & 30,000 \
\text { Irventory } & 87,000 & 105,000 \
\text { Net plant and equipment } & 120,000 & 96,000
\end{array}$$
If Walker's quick ratio is 3.00 for 2017, what is the amount of its current liabilities?
A)$325,000
B)$263,000
C)$285,000
D)There is not enough information to answer this question.Solution (in thousands):
Quick ratio = ($451 + $302 + $36) / x = 3.0
X = $263

Quizplus · Accepted Answer

Using the quick ratio formula and the given information on assets, we can solve for current liabilities. The quick ratio is given as 3.0 and the sum of quick assets (cash, marketable securities, and accounts receivable) is $789,000 ($451,000 + $302,000 + $36,000). By plugging these values into the quick ratio formula and solving for current liabilities (x), we get $263,000. Therefore, the correct answer is B.

Walker Company Has the Following Assets on January 1, 2017