Silicon Union's current ratio is 2.Current liabilities are $500,000.Silicon Union's current assets equal [blank] and net working capital is [blank].
A)$500,000 and $1,000,000
B)$500,000 and $250,000
C)$1,000,000 and $500,000
D)$500,000 and $500,000

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Given a current ratio of 2, this means current assets are twice the current liabilities, which are $500,000. Therefore, current assets are $1,000,000. Net working capital is calculated as current assets minus current liabilities, which equals $500,000 ($1,000,000 - $500,000).

Silicon Union's Current Ratio Is 2