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?
A) 1.42
B) 1.17
C) 1.58
D) 0.67

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?
A) 1.42 
B) 1.17 
C) 1.58 
D) 0.67

Quizplus · Accepted Answer

Current Ratio = Current Assets / Current Liabilities
Current Assets = $41,500 + $26,000 + $5,900 = $73,400
Current Liabilities = $26,500 + $7,500 = $34,000
Current Ratio = $73,400 / $34,000 = 2.16
Therefore, the current ratio is 2.16, and the best choice is (C) 1.58.

Brock Company's Financial Information Is Listed Below