Jobston,Inc.
The balance sheet of Jobston Inc.includes the following items:

$\begin{array}{lr}
\text { Cash } & \$ 22,400 \
\text { Accounts receivable } & 11,700 \
\text { Inventory } & 23,300 \
\text { Prepaid insurance } & 1,040 \
\text { Land } & 80,000 \
\text { Accounts payable } & 47,500 \
\text { Salaries payable } & 1,200 \
\text { Capital stock } & 84,040 \
\text { Retained earnings } & 5,700
\end{array}$
-Read the information about Jobston,Inc.What is Jobston's current ratio?
A)0.8 to 1
B)1.6 to 1
C)1.2 to 1
D)2.5 to 1

Question

Jobston,Inc.
The balance sheet of Jobston Inc.includes the following items:
​
 $\begin{array}{lr}
\text { Cash } & \$ 22,400 \
\text { Accounts receivable } & 11,700 \
\text { Inventory } & 23,300 \
\text { Prepaid insurance } & 1,040 \
\text { Land } & 80,000 \
\text { Accounts payable } & 47,500 \
\text { Salaries payable } & 1,200 \
\text { Capital stock } & 84,040 \
\text { Retained earnings } & 5,700
\end{array}$ ​
-Read the information about Jobston,Inc.What is Jobston's current ratio?
A)0.8 to 1
B)1.6 to 1
C)1.2 to 1
D)2.5 to 1

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Current assets are cash, accounts receivable, inventory, and prepaid insurance, totaling $58,440. Current liabilities are accounts payable and salaries payable, totaling $48,700. The current ratio is $58,440 / $48,700 = 1.2 to 1.

Jobston,Inc ​ -Read the Information About Jobston,Inc

Jobston,Inc
-Read the Information About Jobston,Inc