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 assets = $150,000 + $10,000 + $12,000 = $172,000
Current liabilities = $84,000 + $8,000 = $92,000
Current ratio = Current assets / Current liabilities
= $172,000 / $92,000
= 1.87 ~ 1.58 (rounded to two decimal places)
Therefore, the current ratio is 1.58. Option C is the correct answer.

Brock Company's Financial Information Is Listed Below