Corona Company's balance sheet accounts follow: What is Corona Company's current ratio for 2014?
A) 1.96
B) 2.32
C) 1.07
D) 1.92
E) 2.17

Question

Corona Company's balance sheet accounts follow:  What is Corona Company's current ratio for 2014?
A) 1.96 
B) 2.32 
C) 1.07 
D) 1.92 
E) 2.17

Quizplus · Accepted Answer

By adding up the current assets and dividing them by current liabilities, we get the current ratio. Current ratio = (cash + accounts receivable + inventory)/current liabilities. Plugging in the numbers for Corona Company in 2014, we get (216,000 + 144,000 + 360,000) / 360,000 = 1.92. Therefore, the best choice is D.

Corona Company's Balance Sheet Accounts Follow: What Is Corona