Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. What is the current ratio?

Question

Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.  What is the current ratio?

Quizplus · Accepted Answer

Current ratio = Current Assets / Current Liabilities

Current Assets = $22,500 + $1,800 + $29,000 + $3,500 = $57,800
Current Liabilities = $15,000 + $1,000 = $16,000

Current ratio = $57,800 / $16,000 = 3.61

Therefore, the current ratio is 3.61, which is closest to option C) 1.58.

Brock Company's Financial Information Is Listed Below