The Barkatorium Pet Supplies accountant has recorded the following: Total current assets = $60,000, including Cash = $24,000; Accounts Receivable = $20,000; and Inventory = $16,000. Total assets = $230,000; Total current liabilities = $48,000; and Total current and long-term liabilities = $98,000. The store's current ratio = 1.25. The store's acid-test ratio = .92

Question

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The current ratio = Total current assets/total current liabilities = $60,000/$48,000 = 1.25. The acid-test ratio = Cash + Accounts Receivables/Total current liabilities = .92.

The Barkatorium Pet Supplies Accountant Has Recorded the Following: Total