Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The acid-test ratio at the end of Year 2 is closest to:

Question

Excerpts from Colter Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The acid-test ratio at the end of Year 2 is closest to:

Quizplus · Accepted Answer

Quick assets = Cash + Marketable securities + Accounts receivable + Short-term notes receivable
= $90 + $0 + $100 = $190
Acid-test ratio = Quick assets ÷ Current liabilities = $190 ÷ $320 = 0.59 (rounded)

Excerpts from Colter Corporation's Most Recent Balance Sheet Appear Below