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. Assets
Liabilities and Stockholders' Equity
Number of shares of common stock 6,000
Market price of common stock $20
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. Assets
 Liabilities and Stockholders' Equity
 Number of shares of common stock 6,000
Market price of common stock $20
What is the current ratio?

Quizplus · Accepted Answer

Current Ratio = Current Assets / Current Liabilities

Current Assets = Total Assets - Fixed Assets 
= $151,000 - $60,000 
= $91,000

Current Liabilities = Total Liabilities - Long-Term Debt 
= $45,000 - $15,000 
= $30,000

Current Ratio = $91,000 / $30,000 
= 1.58

Therefore, the current ratio is 1.58, and the best choice is C.

Brock Company's Financial Information Is Listed Below