Bass Tours
The following balances were taken from the company's records:
$$\begin{array} { l r l r }
\text { Inventory } & \$ 380,000 & \text { Accounts receivale } & \$ 190,000 \
\text { Land } & 290,000 & \text { Accounts payable } & 180,000 \
\text { Cash } & 129,000 & \text { Unearned revenue } & 110,000 \
\text { Prepaid rent } & 33,000 & \text { Common shares } & 312,000 \
\text { Retained eargings } & 220,000 & \text { Long-term notes payable } & 200,000
\end{array}$$
-Refer to the figure Bass Tours.How much is the current ratio?

Question

Bass Tours
The following balances were taken from the company's records:
 $$\begin{array} { l r l r } 
\text { Inventory } & \$ 380,000 & \text { Accounts receivale } & \$ 190,000 \
\text { Land } & 290,000 & \text { Accounts payable } & 180,000 \
\text { Cash } & 129,000 & \text { Unearned revenue } & 110,000 \
\text { Prepaid rent } & 33,000 & \text { Common shares } & 312,000 \
\text { Retained eargings } & 220,000 & \text { Long-term notes payable } & 200,000
\end{array}$$
-Refer to the figure Bass Tours.How much is the current ratio?

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Current assets are Inventory ($380,000), Accounts receivable ($190,000), Cash ($129,000), and Prepaid rent ($33,000), totaling $732,000. Current liabilities are Accounts payable ($180,000) and Unearned revenue ($110,000), totaling $290,000. The current ratio is $732,000 / $290,000 = 2.52 to 1.

Bass Tours the Following Balances Were Taken from the Company's

Bass Tours
the Following Balances Were Taken from the Company's