Upriver Tours has balance sheet values of: Inventory $70,500; accounts receivable $50,700; accounts payable $58,900; cash $32,300,notes payable $20,000,long-term debt $134,700,and net fixed assets $504,500.What is the current ratio?
A)1.95
B).95
C)2.11
D)1.98
E).98

Question

Quizplus · Accepted Answer

Current ratio = Current Assets / Current Liabilities
Current Assets = Inventory + Accounts Receivable + Cash
= $70,500 + $50,700 + $32,300
= $153,500
Current Liabilities = Accounts Payable + Notes Payable
= $58,900 + $20,000
= $78,900
Current Ratio = $153,500 / $78,900
= 1.95 approximately. 
Therefore, the current ratio is 1.95. The best choice is A.

Upriver Tours Has Balance Sheet Values Of: Inventory $70,500; Accounts