The financial statements of Island Furniture Company include the following items:

What is the 2019 acid-test ratio? (Round your answer to two decimal places. )

Question

The financial statements of Island Furniture Company include the following items:

What is the 2019 acid-test ratio? (Round your answer to two decimal places. )

Quizplus · Accepted Answer

D)
Acid-test ratio = (Cash + Short-term investments + Net current receivables)/ Total current liabilities
Acid-test ratio = (Cash $49,500 + Short-term investments $33,000 + Net current receivables $102,000)/ $309,000
Acid-test ratio = $184,500 / $309,000
Acid-test ratio = 0.60

The Financial Statements of Island Furniture Company Include the Following