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 Ratio = Current Assets / Current Liabilities
Current Assets = Cash + Accounts Receivable + Inventory = 40,000 + 45,000 + 55,000 = 140,000
Current Liabilities = Accounts Payable + Accrued Expenses = 80,000 + 30,000 = 110,000
Current Ratio = 140,000 / 110,000 = 1.27
The closest answer choice to this calculation is C) 1.58.

Brock Company's Financial Information Is Listed Below