Excerpts from Colter Corporation's most recent balance sheet appear below:
Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720.
-The acid-test (quick)ratio at the end of Year 2 is closest to:
A) 0.72
B) 0.83
C) 0.59
D) 1.25

Question

Excerpts from Colter Corporation's most recent balance sheet appear below:
  Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720.
-The acid-test (quick)ratio at the end of Year 2 is closest to:
A) 0.72 
B) 0.83 
C) 0.59 
D) 1.25

Quizplus · Accepted Answer

Quick assets = Cash + Marketable securities + Accounts receivable + Short-term notes receivable
= $90 + $0 + $100 = $190
Acid-test ratio = Quick assets ÷ Current liabilities = $190 ÷ $320 = 0.59 (rounded)

Excerpts from Colter Corporation's Most Recent Balance Sheet Appear Below