The financial statements of Weston Office Supply include the following items: $$\begin{array} { l r r }
& 2017 & 2016 \
\text { Cash } & \$ 43,500 & \$ 50,000 \
\text { Short-term Investments } & 27,000 & 17,000 \
\text { Net Accounts Receivable } & 102,000 & 97,000 \
\text { Merchandise Inventory } & 125,000 & 119,000 \
\text { Total Assets } & 527,000 & 554,000 \
\text { Total Current Liabilities } & 251,000 & 242,000 \
\text { Long-term Note Payable } & 59,000 & 51,000
\end{array}$$ What is 2017 current ratio? (Round your answer to two decimal places. )

Question

The financial statements of Weston Office Supply include the following items: $$\begin{array} { l r r } 
& 2017 & 2016 \
\text { Cash } & \$ 43,500 & \$ 50,000 \
\text { Short-term Investments } & 27,000 & 17,000 \
\text { Net Accounts Receivable } & 102,000 & 97,000 \
\text { Merchandise Inventory } & 125,000 & 119,000 \
\text { Total Assets } & 527,000 & 554,000 \
\text { Total Current Liabilities } & 251,000 & 242,000 \
\text { Long-term Note Payable } & 59,000 & 51,000 
\end{array}$$ What is 2017 current ratio? (Round your answer to two decimal places. )

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. For 2017, current assets are Cash ($43,500) + Short-term Investments ($27,000) + Net Accounts Receivable ($102,000) + Merchandise Inventory ($125,000) = $297,500. Current liabilities are $251,000. Thus, the current ratio is $297,500 / $251,000 = 1.19.

The Financial Statements of Weston Office Supply Include the Following