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

Acid-test ratio = (Cash + Short-term investments + Net current receivables)/ Total current liabilities
Acid-test ratio = (Cash $45,500 + Short-term investments $26,000 + Net current receivables $102,000)/ $302,000
Acid-test ratio = $173,500 / $302,000
Acid-test ratio = 0.57

The Financial Statements of Island Furniture Company Include the Following