CPR Corp.has cash of $100,000; short-term notes payable of $75,000,accounts receivable of $125,000; accounts payable of $140,000; inventories of $200,000; and accruals of $55,000.What is CPR's current ratio?
A) 1.57
B) 2.71
C) 1.42
D) 0.64

Question

Quizplus · Accepted Answer

Current ratio = (Current assets) / (Current liabilities)Current assets = Cash + Accounts receivable + Inventories = $100,000 + $125,000 + $200,000 = $425,000Current liabilities = Short-term notes payable + Accounts payable + Accruals = $75,000 + $140,000 + $55,000 = $270,000Current ratio = $425,000 / $270,000 = 1.57

CPR CorpHas Cash of $100,000; Short-Term Notes Payable of $75,000,accounts Receivable