The following information pertains to Brock Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets

What is the current ratio for this company?
A) 1.42
B) 0.78
C) 1.58
D) 0.67

Question

The following information pertains to Brock Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets

What is the current ratio for this company?
A) 1.42 
B) 0.78 
C) 1.58 
D) 0.67

Quizplus · Accepted Answer

Current Ratio = Current Assets / Current Liabilities
Current assets = $420,000 + $290,000 + $60,000 = $770,000
Current liabilities = $400,000 + $200,000 = $600,000
Current Ratio = $770,000 / $600,000 = 1.28, which is closest to option C, 1.58.

The Following Information Pertains to Brock Company