The classified balance sheet for a company reported current assets of $1,623,850, total liabilities of $799,540, Common Stock of $1,000,000, and Retained Earnings of $130,260.The current ratio was 2.5.
-Use the information above to answer the following question.What is the total amount of current liabilities?
A) $649,540.
B) $4,059,625.
C) $771,920.
D) $799,540.

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Given the current ratio of 2.5 and current assets of $1,623,850, the current liabilities can be calculated as $1,623,850 / 2.5 = $649,540.

The Classified Balance Sheet for a Company Reported Current Assets