Bassell Enterprises has long-term assets of $800, current liabilities of $500, and long-term liabilities of $600. If the current ratio is 2.5, then current assets must be:

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. Given the current ratio of 2.5, we can set up the following equation:

2.5 = Current Assets/500

Multiplying both sides by 500, we get:

Current Assets = 2.5 * 500

Current Assets = 1250

Therefore, the current assets must be $1,250. Choice B is the correct answer.

Bassell Enterprises Has Long-Term Assets of $800, Current Liabilities of $500