The December 31, 2013 balance sheet of Rollins Company shows current assets of $16,000 and current liabilities of $10,000. On January 1, 2014 the company recorded the following entries: After the two journal entries were recorded, the company current ratio is:
A)2 to 1
B)1.6 to 1
C)2.4 to 1
D)2.1 to 1

Question

The December 31, 2013 balance sheet of Rollins Company shows current assets of $16,000 and current liabilities of $10,000. On January 1, 2014 the company recorded the following entries:  After the two journal entries were recorded, the company current ratio is:
A)2 to 1 
B)1.6 to 1 
C)2.4 to 1 
D)2.1 to 1

Quizplus · Accepted Answer

$16,000 current assets + $5,000 incr. in cash + $3,000 incr. in cash - $3,000 decr. in accts. re

The December 31, 2013 Balance Sheet of Rollins Company Shows