Freiman Corporation's most recent balance sheet and income statement appear below:

Balance SheetDecember 31, Year 2 and Year 1(in thousands of dollars)Year 2Year 1AssetsCurrent assets:Cash$196$156Accounts receivable, net310330Inventory156166Prepaid expenses5858Total current assets720710Plant and equipment, net880880Total assets$1,600$1,590Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable$166$186Accrued liabilities108108Notes payable, short term7888Total current liabilities352382Bonds payable334344Total liabilities686726Stockholders' equity:Common stock, $2 par value136136Additional paid-in capital290290Retained earnings488438Total stockholders' equity914864Total liabilities & stockholders' equity$1,600$1,590

Income Statement For the Year Ended December 31, Year 2(in thousands of dollars)Sales (all on account)$2,030Cost of goods sold1,140Gross margin890Selling and administrative expenses449Net operating income441Interest expense71Net income before taxes370Income taxes (30%)111Net income$259

The acid-test (quick) ratio at the end of Year 2 is closest to:

Brewer_8e_Rechecks_2019_10_30

Multiple Choice

• 1.14
• 1.44
• 1.68
• 2.11