Use the information in the adjusted trial balance reported in Exercise 14-1 to compute the current ratio as of the balance sheet date. Interpret the current ratio for Jones Trucking Company. Assume that the industry average for the current ratio is 1.5. (The current ratio was introduced in Chapter 6. The current ratio 1s Current assets divided by current liabilities.)

Exercise 14-1:

Use the following adjusted trial balance of Jones Trucking Company to prepare the (1) single-step income statement and (2) statement of owner’s equity, for the year ended December 31, 2008. The K. Jones, Capital account balance is \($185,000\) at December 31, 2007.

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Account Title Cash Accounts receivable Office supplies Trucks Accumulated depreciation-Trucks Debit Credit $ 18,000 17,500 3,000 172,000 $ 36,000 85,000 Land... Accounts payable. 12,000 Interest payable 4,000 Long-term notes payable 53,000 K. Jones, Capital 185,000 K. Jones, Withdrawals 20,000 Trucking fees earned 130,000 Depreciation expense-Trucks 23,500 Salaries expense 61,000 Office supplies expense 8,000 Repairs expense-Trucks.. 12,000 Totals $420,000 $420,000