Gros-Morne Inc.has the following assets and liabilities on their balance sheet: $$\begin{array} { l l }
\text { Cash and temporary investments } & \$ 25,000 \
\text { Accounts receivable } & 125,000 \
\text { Inventory } & 225,000 \
\text { Capital assets (net) } & 462,500 \
\text { Accounts payable } & 115,000 \
\text { Other payables } & 138,000 \
\text { Bonds payable } & 100,000
\end{array}$$ What is their current ratio?

Question

Gros-Morne Inc.has the following assets and liabilities on their balance sheet: $$\begin{array} { l l } 
\text { Cash and temporary investments } & \$ 25,000 \
\text { Accounts receivable } & 125,000 \
\text { Inventory } & 225,000 \
\text { Capital assets (net) } & 462,500 \
\text { Accounts payable } & 115,000 \
\text { Other payables } & 138,000 \
\text { Bonds payable } & 100,000
\end{array}$$ What is their current ratio?

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. Current assets include cash and temporary investments ($25,000), accounts receivable ($125,000), and inventory ($225,000), totaling $375,000. Current liabilities include accounts payable ($115,000) and other payables ($138,000), totaling $253,000. Thus, the current ratio is $375,000 / $253,000 = 1.48.

Gros-Morne Inc What Is Their Current Ratio? A)1

Gros-Morne Inc What Is Their Current Ratio?
A)1